Is renting a property financially more worthwhile than previously thought?

An interesting piece of research caught our eye recently, stating that the financial benefits of renting a home rather than owning one may have been underrated.

A financial researcher at the University of Stirling, Dr Isaac Tabner, has said that the cost of renting includes many additional expenses incurred by home owners, such as building insurance and property maintenance. He says a simple comparison between rent and mortgage costs overlooks these additional hidden costs and can lead to an overestimate of the financial benefits of owning versus renting.

The new research, published in the International Review of Financial Analysis, provides a detailed explanation of how costs of renting versus buying a home can be compared. The research takes tenants’ and owners’ own personal circumstances and macro-economic conditions into account. In reviewing a number of factors, such as transaction costs, rental yields, opportunity costs, inflation and the length of time owning a home, the study also shows that – during periods of deflation or zero inflation – people who rent are typically better-off financially than those who own their home.

Tabner said: “It is often thought that buying a house makes more financial sense in the long run: however, renting is frequently more worthwhile than buying for financially-constrained households, as well as households likely to relocate within 10 years. As well as a reduced ability to recover transaction costs, households relocating within a few years face a higher risk that medium-term prices will move against them, thus reducing or eliminating their equity, while financially-constrained households face much higher mortgage costs.”

At Poole Townsend, we understand that each individual’s personal circumstances are different, so it’s best to come and talk to our mortgage advisers and sales and lettings experts to see what might be the best route for you. If you’re unsure about renting versus buying, please don’t hesitate to speak to a member of our friendly team - get in touch with us here.

You’re in safe hands

Trust our team of local experts to provide the best advice on a wide range of legal and financial issues whenever you’re facing a life change and need the best support.

0800 389 2939

Our team are available, weekdays 8am-8pm & Saturdays 9am-1pm

Find Your BranchMEET THE TEAM

She'll be glad you planned ahead

Organising your finances today, while planning for the future can be a challenge. We’ll put the kettle on – and take the pressure off.


You'll know when it's time to talk

From making a will, to matters of business law our qualified solicitors can offer advice and guidance. Pop in for a chat or call us to make your free appointment.


Sign up for our newsletter

Your details

No charge. Cancel anytime. We value your privacy and will not share your details.

© Poole Townsend 2017 - 2018. All rights reserved.
Poole Townsend are Independent Financial Advisers authorised and regulated by the Financial Conduct Authority. Authorised and Regulated by the Solicitors Regulation Authority No. 00076553.
Poole Townsend Estates Limited
incorporates our Estate Agency and Conveyancing services
Poole Townsend Estates Limited (Company No: 10960705) is a company registered in England & Wales with its registered office at 69-75 Duke Street, Barrow in Furness, LA14 1RP. A list of directors is available at the registered office address. Regulated by the Council for Licensed Conveyancers to provide Conveyancing Services. (Firm no 3438). We are also members of the National Association of Estate Agents. Our Estate Agency is a member of the Property Ombudsman Scheme
Please click here to see the CLC Handbook.
Professional Indemnity Insurance – please contact Martin Oates at the address above if you require details of the cover held.
Registered with the Information Commissioner’s Office for data protection purposes (ICO No: Z5054999)

Book Your Free Valuation

Fill out the form below and we'll get in touch to arrange your free valuation.

Your Details

We value your privacy and will not share your details.