19 May 2017
Zoopla, a leading UK property website, has determined that it’s cheaper to rent than buy in many British cities and towns. Which British locations top the list?
Renting, rather than buying, a home is now cheaper in more than half of Britain’s major cities and towns, according to an analysis by property website Zoopla. Which cities top the list? Based on the monthly cost of a two-bedroom home, the current, comparative cheapness of renting contrasts with the findings of a similar Zoopla survey last autumn, which found that buying was cheaper in 60 per cent of the 50 conurbations surveyed. The survey is based on rental costs compared to the cost of servicing a 25-year mortgage on which a 10 per cent deposit has been paid. What it does not do is take into account is the capital gain likely to accrue for purchasers as a result of their property increasing in value - something that renters will not, of course, benefit from. The difference between renting and buying was found to be most marked in London, where the average asking price on Zoopla is now almost £600,000. Mortgage repayments on a two-bed property currently amount to £3,001 while renting a similar home averages £1,861, according to the research.
Places such as Reading, Bristol and Cambridge, which have seen a sharp rise in property prices recently, have joined the list of areas where it is now cheaper to rent rather than buy, while Glasgow and Dundee top the list of urban areas where rents were found to be more expensive than mortgage repayments. Earlier this month, Zoopla reported a decline in rents in London and SE England, mainly because a sharp rise in renting costs last year had led to affordability becoming increasingly stretched. Martin Totty, chief executive of HomeLet, said rents had also recently been rising at a more modest pace across the country for the same reason. “This trend is ongoing: we continue to see landlords and letting agents weighing tenant affordability considerations very seriously,” he said. In the latest survey, Zoopla calculated the average monthly rental payment across all 50 towns and cities to be £690, compared to average monthly mortgage repayments of £737.