Finding it hard renting a house? It's cheaper to buy in four out of five British cities

Published 15th Jun 2011

Low interest rates and house price falls have made it cheaper to buy a home than to rent one in four out of five British cities, research indicated today.

The cost of renting a typical first-time buyer property is 9.7 per cent more than buying a similar home, based on an interest-only mortgage charging a rate of five per cent, according to property website Zoopla.co.uk.

Milton Keynes is the most expensive town in which to rent a home rather than buy one, with a two-bedroom home costing 43 per cent more than mortgage payments on a comparable property.

It is followed by Birmingham, where renting costs 37 per cent more than buying, and Warrington and York, where rents are 29 per cent higher than mortgage costs.

It would be 27 per cent more expensive to rent a home than to buy one in Northampton and Coventry, with Bradford, Preston, Peterborough and Barnsley completing the top 10 locations where being a homeowner makes better financial sense than being a tenant.

Even in London, it is still 16 per cent cheaper to buy a home on an interest-only basis than it would be to rent a comparable property.

At the other end of the scale, people are still better off renting in Poole, where it is 27 per cent cheaper to be a tenant than to buy a home, while rents are 12 per cent lower than mortgage payments would be in Plymouth.

Renters are eight per cent better off than buyers in Stockport, while people can save seven per cent by being a tenant in Oldham and four per cent in Bristol and Huddersfield.

It is also slightly cheaper to rent a home than to buy one in Bournemouth, Lincoln and Swansea, while average rents and mortgage payments cost around the same in Cardiff.

Nicholas Leeming, business development director of Zoopla.co.uk, said: ‘The relative cost of renting as opposed to buying has increased over the past 12 months as rents have risen and house prices and interest rates have remained flat.

‘Almost 750,000 would-be first-time buyers have reluctantly ended up as renters over the past three years as a result of being unable to get a mortgage.

‘With current house prices and interest rates where they are and with rents on the rise, for those who can get a mortgage, there may never have been a better time to buy.’

Source: ' ThisIsMoney '

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