There’s no sugar coating it: with the average UK house price standing at £269,000 and the average first time buyer deposit in England costing a whopping £68,154, buying a home in 2025 can be a drain on your finances.
This compares to just over 50 years ago, in 1974, when the average cost of a home was £10,027. Of course, whether you rent or buy there is a cost for the roof over your head. But which is likely to put you in the best financial position?
Well, according to research from the Mortgage Advice Bureau (MAB), renters could miss out on almost £340,000 in wealth creation by not buying a home.
The great divide
The research, which compared the average cost of renting compared to buying, showed that homeownership builds equity and can be a ‘long-term investment growth opportunity’ as opposed to renting.
According to the research, after two years of being a homeowner, home buyers start to save around £99 as opposed to renters. By year 10, this wealth creation gap between homeowners and renters continues to rise with home buyers now saving £12,157. And over a 30-year period, homeowners could save £206,031 in housing costs.
According to MAB, if these savings were invested over time, they could yield a further £132,139, taking the total missed financial opportunity for renters to £338,170. And in certain cities, like London, the ‘missed opportunity’ could be higher — rising to £540,687.
The benefits are real
“There are many benefits of homeownership,” award-winning mortgage adviser Jo Jingree says. “As the research shows, owning a home often puts you in a better financial position in the long-run than renting.”
Jo continues: “Plus, if you have decided to buy a home with a mortgage, once you come to the end of your term, you’ll own your four walls outright — unlike if you were renting, where you’d still have a chunky rent payment to pay each month. Choosing to buy can also give you a strong sense of security, especially in the future when you reach retirement as it’s common for income to reduce at this stage.”
To buy or not to buy
As you might expect, buying a home isn’t as simple as searching on property websites, viewing the home and then signing on the dotted line. There’s also no guarantee you’ll generate a good return by investing in property.
And with high property prices can come hefty deposits, so getting on the ladder can take years (and years) worth of sacrifice and saving. So much so, 33% of renters aged 25-44 don’t think they will ever own a home.
“Though some may feel that way, the upside is that there are many other alternative ways to get onto the property ladder,” Jo says.
“From guarantor mortgages and shared ownership to buying with a friend or sibling or choosing lenders who require a 5% deposit, rather than a bulky 20% chunk,” Jo explains.
Got your heart set on buying?
So, contrary to what you might have heard — no matter whether you’re self employed, credit impaired, a first time buyer or you feel as though the odds are stacked against you — there are a range of options when it comes to buying a home. It’s just about taking that first step to see what’s possible.
Multi-award-winning mortgage adviser Jo offers a free 30 minute no obligation phone call. So if you’ve decided 2025 or 2026 is the year you want to scope out the property market, do get in touch.
There may be a fee for mortgage advice. The precise amount will depend upon your circumstances, but we estimate it will be £399.
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