Buying property is now more cost-effective than it has ever been compared to renting, proving cheaper in 47 out of 50 British towns, compared to 40 out of 50 this time last year, according to research. A study by a leading property portal showed that renting is 15% more expensive on average than owning across the country, up from a 10% premium last year.
The survey examined the prices and rents of 78,000 two-bed flats currently on the market, comparing rental costs to the payments on an interest-only mortgage at 5% a year.
It found that Swansea, Plymouth and Bournemouth were the only towns where renting was a better option than buying, with rents proving cheaper by 9.3%, 6.6% and 5.7% respectively.
By comparison, renters in Milton Keynes are worst off, with rents 36% more expensive than the cost of owning, leaving them an average of £2,436 a year worse off.
Warrington and Walsall came second and third with rental premiums of 33% and 32% respectively.
In addition, renting in London is 31% more expensive than owning, despite the average cost of a two-bedroom flat standing at £442,036. Tenants in London will pay an average of £6,888 more a year than home owners.
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 check out the mortgage deals and buy.
