14:43 PM, 26th November 2010, About 13 years ago
A new rent survey based on the average cost of renting compared to buying a similar home on an interest only mortgage at 5%.
Aberdeen is the cheapest place in the country to let a home, with rents 22% below the average cost of buying a similar home on an interest only mortgage at 5%.
The next cheapest were:
The most expensive cities to rent are York and Birmingham, where average rents are 39% higher than the costs of buying.
Rents were 20% more than buying costs in Derby, Reading, Milton Keynes, Walsall, Hull, Dundee, Norwich, Bradford, Preston, Peterborough, Northampton and Coventry.
Buying is still cheaper than renting in London, which has the highest property prices in Britain, with renting showing as 14% more expensive.
Nicholas Leeming, of property rent and sales portal Zoopla that compiled the data, said: “For those who are able to buy a home, costs are low, but for those who can’t, costs are much higher – and the doorway to entry into the housing market is narrower than ever.
“The freezing up of credit has put home ownership beyond the reach of many renters, and it’s driving a larger and larger wedge between them and owner-occupiers.”
He added that while buying wins out over renting now, if interest rates increased by 1% and rents remain the same, renting would become more cost-effective in 72% of the 50 town and cities surveyed.
Overall, the average differential has gone up from 8.7% in July to 9.9% in November – with the rise blamed on a chronic shortage of mortgages that has led people to rent rather than buy, pushing up rents in the process.
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