Finance / Renting cheaper than buying in 54% of major cities and towns, study finds
Renting cheaper than buying in 54% of major cities and towns, study finds
18 May 2017
Renting could work out cheaper than buying a property in more than half of Britain's major cities and towns, according to analysis from a property website.
Zoopla researched the monthly cost of renting a home with two bedrooms, compared with servicing a mortgage, in Britain's 50 biggest urban areas.
It found renting is cheaper than buying in 54% of locations. This marks a turnaround compared with similar research carried out in October 2016, when buying was found to beat renting in most (60%) places.
The cost of renting on a monthly basis was found to be particularly cost-effective compared with buying in London, where the typical property asking price is £599,950, the research found.
The average monthly rent in London was found to be £1,861, while a mortgage repayment could set a home owner back by £3,001 a month, according to the calculations.
Cambridge and Bristol, where house prices have jumped in recent years, were also on the list of places where the monthly cost of renting a home is particularly likely to beat buying one.
Meanwhile, Glasgow and Dundee topped the list of places where monthly mortgage payments were found to be cheaper than renting.
The research analysed the asking prices and rents on two bedroom homes which might typically be bought by first-time buyers.
It assumed a buyer would have a 10% deposit to put down and that they would be repaying their mortgage over 25 years.
Across Britain's 50 biggest cities, the average monthly rental payment on a two bedroom home is £690 - £47 less per month than those making mortgage repayments of £737, Zoopla found.
Lawrence Hall, a spokesman for Zoopla, said: "These figures are encouraging for those who are currently renting and perhaps looking to save as much as they possibly can to get on the property ladder.
"It is important to remember that whilst renters may be better off in the short to medium term in some areas of the country, buying a property is a long term investment."
Here are the top 10 cities where renting could beat buying, according to Zoopla, with the average monthly rent followed by the average home asking price and a monthly mortgage repayment based on someone having a 10% deposit:
1. London, £1,861, £599,950, £3,001
2. Cambridge, £1,099, £297,498, £1,488
3. Brighton, £1,199, £315,000, £1,576
4. Reading, £1,000, £260,000, £1,301
5. Bedford, £764, £195,000, £975
6. Liverpool, £623, £156,750, £784
7. Southampton, £779, £189,750, £949
8. Bristol, £900, £210,995, £1,056
9. Oldham, £476, £109,950, £550
10. Bournemouth, £848, £194,975, £975
And here are the top 10 locations where buying could beat renting, according to Zoopla, with the average monthly rent followed by the average home asking price and a monthly mortgage repayment based on having a 10% deposit:
1. Glasgow, £649, £95,000, £475
2. Dundee, £549, £82,000, £410
3. Coventry, £775, £125,000, £625
4. Bradford, £493, £79,998, £400
5. Barnsley, £450, £75,000, £375
6. Leeds, £736, £125,000, £625
7. Middlesbrough, £497, £84,950, £425
8. Bolton, £493, £85,000, £425
9. Birmingham, £749, £130,000, £650
10. Walsall, £523, £91,000, £455
Yui Mok/PA Wire