14/12/11 - Buying is cheaper than renting

Buying property is more affordable than renting in 47 out of 50 of Britain’s largest towns, figures from Zoopla has revealed. 

Renting is now on average 15% more expensive than owning due to the increasing cost of rent and low mortgage rates. This is up from 10% last year.

High rental demand due to the difficulties potential first-time buyers are facing in getting financing and low mortgage rates are cited as the primary drivers for the difference.

Last year it was cheaper to buy than rent in 40 out of 50 of the same towns.

Nicholas Leeming, business development director at Zoopla, said: “Although buying may be more cost-effective than ever compared to renting, many potential buyers aren’t able to take advantage because they can’t access mortgage finance.

“The shortage of financing especially to first-time buyers has pushed demand for rental property through the roof. But for those lucky enough to be in a position to get a mortgage there may never have been a better time to buy.”

Zoopla compared current asking prices and rents of over 78,000 two-bedroom flats on the market, comparing the rental cost to the cost of ownership based on servicing an interest only mortgage at 5% per annum.

Source: Mortgage Introducer

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