You are here: Home - Mortgages - Buy To Let - News -

Homeownership cheaper than renting in 90% of towns

0
Written by:
11/09/2012
Monthly interest-only mortgage payments are lower than the cost of renting the equivalent property in 44 of the 50 largest towns and cities across Britain, according to research.

Average rents for all two bedroom flats available outside London currently stand at £659 per month while the average asking price for all two bedroom flats currently for sale outside London is £139,451.

A homeowner servicing an interest-only mortgage at a conservative 5% per annum would cost £581 per month, making renting 13% more expensive and leaving buyers nearly £1,000 per year better off.

Places where buying beats renting by the biggest margin include York, Milton Keynes and Derby. At the other end of the spectrum and bucking the overall trend, renting remains the cheaper option in Bournemouth, Swansea and Oldham.

In London, average rents run 17% higher on average than servicing a mortgage. With current asking prices for two bedroom flats in the capital at £483,069 and the average rent on an equivalent property at £2,362 per month, owners in London are £4,200 per year better off than renters.

Lawrence Hall of Zoopla.co.uk, said: “While buying is clearly the better option than renting at the moment based on our research, the difficulty in saving for a deposit and the tight lending conditions are preventing huge swathes of would-be buyers from taking advantage of the current lower cost of owning a home. And with more potential buyers being forced into the rental market, rents are rising based on the higher demand.”

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Unfamiliar banks woo savers with top rates…is your money safe?

If you’ve been keeping an eye on the savings best buy tables, you’ll have noticed some unfamiliar names lu...

What the base rate rise means for you

The Bank of England has raised the base rate by 0.25% to 0.5% – following on from the increase from 0.1% to ...

How to get help with your energy bills

The rise in the energy price cap from April will mean millions of households will pay hundreds of pounds a yea...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week