Buying is Cheaper than Renting in 90% of Towns

Buying is Cheaper than Renting in 90% of Towns

16:04 PM, 27th September 2011, About 13 years ago

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"Renting is more expensive, but you need the big deposit to avoid it"

The falling cost of buying a home over the past 12 months coupled with demand pushing up the cost of renting has made buying cheaper than letting in 45 of 50 major cities, according to Zoopla.

Providing buyers can raise a deposit and mortgage, it is on average 13% cheaper than renting a similar property.

The cheapest places to live compared with renting are Milton Keynes by 39%, Birmingham (34%), Northampton (33%), Warrington (32%) and York (29%).

The study based calculations on buying or renting a two bedroom flat.

Renting in London is an average 28% more than the cost of owning. A flat costs £430,608 in the capital, leaving renters paying £5,964 more a year than owners pay for a mortgage.

Nicholas Leeming, business development director of Zoopla, said: “With house prices down, low interest rates and sky high demand in the private rental sector, buying has never been a better option for those able to secure a mortgage.

“And with owners reducing prices further in order to achieve a sale before Christmas, there may well not have been a better time to buy in recent times.”

A separate study by surveying firm E.surv pointed out that the cost of renting will keep rising until the banks can offer more accessible mortgages to buyers.

Director Richard Sexton said: “The banks are being held back by weak economic growth and the spectre of a double-dip recession, as well as the regulator’s insistence they hold more capital. They are in no mood to target first-time buyers.”

“While more buyers able to secure a deal with an 85 per cent or higher loan-to-value than at any point since May 2010, this is not happening on a large scale.”

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