With so many young people struggling to save up a deposit to get on the housing ladder, it will come as a shock to hear they may be ploughing nearly a fifth of the average price of a house into landlords' pockets.
According to research from Santander Mortgages, homeowners spend an average of £41,900 on rent before they manage to buy their own home, with many renting for around seven years.
During this time the main aim would likely be to save for a deposit, but this will be increasingly difficult as they are caught in a trap with a substantial part of their income going on rent, which based on current rental prices stands at an average of £474 per month. It's no wonder many, who have the option, decide to remain with the parents to give them the opportunity to save.
In fact, those that never manage to get on the ladder, or perhaps choose to continue to enjoy the flexibility of renting, actually end up paying more than the cost of a house to landlords. Lifetime tenants will be likely to pay upwards of £296,000 in rent based on current prices.
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."
With mortgage interest rates so low at the moment, the Help to Buy scheme boosting availability of 95% mortgages, and rental prices rising, there's no better time to start thinking about taking the first steps towards owning your own home. Take a look at our mortgage finder to find a deal that suits you and see if you could be putting those rental costs to more use.
Another cost you won't be dealing with when you own your own home is the security deposit, which currently stands at an average of £657. This is supposed to be a safety net for the landlord in case you defer on your rent or damage anything in the property, and it is supposed to be returned in full if everything is as it should be.
However, many tenants are not receiving the full amount back with only 39% of those renters surveyed reporting full deposit returns. On average landlords are withholding around £130 of tenants' money, enough as it is, but if you consider it over a lifetime of renting this could add up to a staggering £2,201 in losses.
Renting can offer flexibility to move around, particularly due to a career, and for some people it is a sensible option, but if you feel like putting down roots then the dream of owning your own home will always be there; and it doesn't always have to be the most costly option.
Take a look at our savings accounts and put a little away often to get that deposit built up and remember, even if you don't have a large deposit there are some very competitive deals out there for first-time buyers.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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