Buying now cheaper than renting across 90% of Britain
Falling house prices and increasing rental demand has made it cheaper to buy a property than to rent one in 45 of the 50 largest towns across Britain. The cost of renting is now 13% higher on average than the cost of owning, according to the latest research from property website Zoopla.co.uk.
Zoopla.co.uk, which lists over half a million properties for sale or to rent in Britain, analysed the asking prices and rents for all two-bedroom flats currently on the market, comparing the rental cost to the cost of ownership based on servicing an interest-only mortgage at 5% p.a.
Milton Keynes topped the list of locations where buying beats renting with current rents more than 39% higher than the cost of owning, leaving renters on average £2,544 per year worse off. At the other end of the scale, renting remains more cost-effective in Aberdeen, where it costs 9% more to own compared to rent, leaving owners on average £936 worse off.
In London, where the average asking price for 2-bedroom flats currently stands at £430,608, buying still beats renting by a significant margin. The average monthly rent in the capital today is 28% higher than the cost of ownership, leaving renters paying an extra £5,964 annually compared to owners.
Nicholas Leeming, of Zoopla.co.uk, commented: “With house prices down, low interest rates and sky high demand in the private rental sector, buying has never been a better option for those able to secure a mortgage. And with owners reducing prices further in order to achieve a sale before Christmas, there may well not have been a better time to buy in recent times.”.