UK homeowners spend an average of £41,900 on rental payments before buying their first property, according to new research from Santander Mortgages.
On average, homeowners who rent prior to buying spend seven years as a tenant before getting onto the property ladder, rising to 11 years or more for 15% of these homeowners.
For those who don’t enter the property market, the lifetime cost of renting is likely to be upwards of £296,000. That’s based on current private rental prices, which according to Santander’s study, is on average, £474 per tenant per month.
In addition to monthly payments, most private rental tenants are also asked to put down a security deposit, which currently stands at an average of £657 per tenant. Only 39% of those currently renting received the full deposit funds back, with the average amount withheld by landlords being £130, or 20% of the average initial deposit.
Santander says the study suggests that the average homeowner changed home every three years whilst renting, which means those who eventually purchased a property on average lost £3113 of their deposit funds. Those renting throughout their lifetime and moving home with such frequency could see their landlords withhold an average of £2,2014 throughout their renting lifetime.
Miguel Sard, head of Santander Mortgages, said: “Renting may appear to be the most financially viable option for some people, but in the majority of cases it isn’t the most cost effective. Over the years, payments made by rental tenants amount to a staggering sum, and these are not funds that you can recoup.
“The mortgage market is extremely competitive at present, with options available to suit most budgets. Raising sufficient deposit funds can be one of the biggest barriers to purchase, but our new range of Help to Buy mortgages offer competitive fixed and tracker rates to buyers with a 5% deposit, while our standard products also cater for buyers with deposits of 10% or more.”
