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Buying A Home 'More Cost-Effective Than Renting'
Buying a home is more cost-effective than renting in more than a third of cities across Britain, according to a property website.
Zoopla.co.uk looked at the cost of renting a two-bedroom home compared with the cost of servicing a mortgage for someone with a 10% deposit to put down.
It found that the monthly cost of buying works out cheaper than renting in 36% of cities.
Buying is particularly likely to be cheaper than renting in Scotland and areas of northern England such as Hull, Manchester and Sheffield, the report found.
Glasgow and Dundee were found to be the locations where buying is most likely to beat renting. Monthly mortgage payments in Glasgow are around £149 cheaper than rental prices, according to the website, while in Dundee they are £110 cheaper.
London, Reading, Cambridge and Brighton, which have all seen strong house price growth in recent years, were found to be the cities where renting is most likely to work out cheaper than buying.
In London, buyers will pay around £1,084 a month more than rental sector tenants - meaning that buying is just over £13,000 a year more expensive than renting. This makes London the top location where renting beats buying, according to the research.
To carry out the study, Zoopla looked at asking prices and rents for two-bedroom properties currently on the market, assuming that this would be the size of a typical first-time buyer home.
It assumed that a buyer would take out a 25-year repayment mortgage and a fixed interest rate at the current average "best buy'' rate on the market of 4.5%.
On average across the country, a buyer with a 10% deposit would pay around £58 a month more for a two-bedroom property than they would if they were to rent it, Zoopla found.
Lawrence Hall, a spokesman for Zoopla.co.uk, said: "If they can make the leap, and are willing to relinquish the flexibility that comes with renting, tenants up North in particular would be much better off buying and paying off a mortgage every month.''
He said that while London and the South East are "by no means cheap places to rent ... growing pressure on housing supply in this corner of the UK from professionals, families and overseas investors means that getting a foothold on to the property ladder in these areas is only becoming a more costly endeavour, and the mortgage payments attached to this are rising to bridge this gap.''
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