Renting now cheaper for first-time buyers than homeownership
The average cost of renting has surpassed the average monthly mortgage payment for the first time since 2010, data from a property portal suggests.
Data from Zoopla found that for a first-time buyer, the average UK rent was £122 cheaper than buying an average-priced rental property.
The firm said this was due to higher mortgage rates and based on a property worth £263,000 with a 15% deposit, on a 30-year term and a 6% mortgage rate.
According to Moneyfacts, as of 18 August the average two-year fixed mortgage rate was 6.76%.
Zoopla put the average rent for such a property at £1,163 and calculated that the monthly mortgage payment would be £1,285.
There are disparities across the UK, as for buyers in Scotland, North East, North West, Northern Ireland, Wales, Yorkshire and Humber, purchasing a home is still cheaper than renting.
To make rental costs similar to mortgage repayments, buyers in southern England would need deposits of 31% or £42,000.
Crushed dreams of homeownership
This data follows a report from Zoopla which found that 42% of adults aged between 18 and 39 years old had given up on the idea of buying a home within the next 10 years.
The proportion was similar among those on higher salaries too, with 38% of respondents earning £60,000 a year saying they did not expect to purchase within the decade.
Respondents cited the cost-of-living crisis, rising house prices and increasing mortgage rates as factors limiting their ability to get onto the housing ladder.