Homeownership offers more than just a place to call your own. In fact, our research shows that for many, renting could be a massive missed financial opportunity. Across a 30-year period, homeowners could be £338,170 better off than renters. This staggering figure comprises £206,031 in cost savings alone, plus an additional £132,139 in potential investment returns if this amount were gradually reinvested.
The financial advantage of homeownership isn’t a long-term pipedream—it begins almost immediately. Homeowners start saving money versus renting by the second year, equating to around £99. If invested into a FTSE 100 tracker fund, for example, this small initial saving could grow to £104 in just one year, demonstrating the power of compounding from day one.
The power of regional insights
The scale of this financial benefit becomes even more apparent when broken down by city, revealing that every market has an opportunity story.
● London renters could face a missed opportunity of £540,687 over 30 years —that’s nearly £50 every single day.
● In Manchester, the figure reaches a substantial £428,223.
● In Bradford, the financial gap is £38,588, a meaningful amount when considered against regional property prices.
Interestingly, buyers in Bristol could see greater savings than those in London. This is because the monthly difference between rent and mortgage payments is significantly wider, leading to larger and earlier savings for Bristolian homeowners.
For brokers, this kind of regional insight is crucial, allowing you to tailor advice precisely to individual customers based on their location. This also provides tangible, data-backed reasons as to why taking that first step onto the property ladder is not only closer in reach than they presumed, but also a financially sound decision.
The true value of homeownership
The financial gap between renting and owning is driven by several key factors that create a significant disparity in wealth over time.
● Fixed versus rising costs: The cost of renting has consistently outpaced fixed-rate mortgage repayments. While rents are subject to ongoing market inflation, the stability offered by a fixed rate mortgage provides a significant financial advantage.
● Varying markets: Different cities have unique property price-to-rent ratios, meaning the financial benefit of buying is more pronounced in some locations than others.
● Compounding growth: The savings a homeowner makes can be reinvested. Our modelling assumes these early savings benefit from compound growth, following the long-term historical performance of a FTSE 100 savings account. This “snowball effect” significantly accelerates a homeowner’s financial position over time.
Overcoming obstacles
While the benefits are clear, many renters still face significant hurdles. According to our survey, the main challenges are:
● High property prices (61%)
● Saving a deposit (56%)
● Job or income insecurity (32%)
● Strict lending criteria (31%)
Despite these hurdles, there’s a powerful opportunity for brokers. 56% of renters would be motivated to buy a home if their mortgage repayments were similar to their current rent—a goal that is increasingly achievable in many parts of the UK.
Interestingly, optimism varies significantly by age. Only 7% of 18–24-year-olds believe they will never be able to buy a home, compared to a much more pessimistic 56% of over-55s, demonstrating the appetite from the next generation of homebuyers.
This is where expert mortgage advice becomes crucial. We can help our customers navigate the market and access a wide range of products designed for low deposits, various income types, and first time buyers, turning a seemingly impossible dream into a reality.
Is the government doing enough to support prospective buyers?
According to our survey, 35% of renters believe it’s getting harder to buy and want more government support, while another 22% feel it’s about the same but still believe additional assistance is necessary. Despite the various schemes available, there appears to be a disconnect between policy and impact. Only 6% of renters were motivated by government schemes, suggesting an awareness gap or a feeling that the schemes aren’t impactful enough.
Although policy shifts are welcome, the most immediate, tangible change for a potential homeowner often comes from tailored, bespoke mortgage advice. By offering personalised guidance, brokers can help clients identify products and solutions that make homeownership achievable, irrespective of market conditions.
Navigating the balance
The sentiment towards buying versus renting is clearly divided, highlighting the opportunity for brokers to offer balanced advice. The long-term view is overwhelmingly in favour of homeownership, with 64% of people believing that buying is more financially secure. However, 73% see renting as “money down the drain.” Notably, 36% of people, particularly younger renters, feel that renting is the safer short-term option due to fewer upfront costs, greater flexibility, and no maintenance responsibilities.
This mixed sentiment presents a clear path forward for brokers. By leveraging the widespread optimism about the long-term benefits of buying, you can engage potential customers. More importantly, you can directly address their short-term fears by presenting tailored affordability scenarios, showing them how homeownership can be both a long-term investment and an affordable reality today.
Leveraging the broker opportunity
Our research makes one thing clear: brokers have a powerful opportunity to engage with renters and turn aspirations of homeownership into reality. The regional financial gap is not just a statistic—it’s a conversation starter.
This approach makes homeownership feel less like a distant dream and more like an achievable, financially sound decision. After all, you’re the expert who can educate and empower renters that taking the first step onto the property ladder is not only within reach, but also the most financially sound decision of their life.
Ben Thompson is deputy CEO of Mortgage Advice Bureau
