According to the latest research by Zoopla, it is cheaper to rent a home than to buy in 54% of cities across the UK.
The average cost of renting a two-bedroomed home across 50 cities in the UK is £690 a month, which is £47 less than the average monthly mortgage payment of £737. This is based on a Loan To Value of 90% and 4.5% interest rate. However, for those who live in London the savings are even higher, with an average monthly rent of £1,861 compared to an average mortgage payment of £3,001 a month.
The number of locations where it is cheaper to rent than buy in the UK has increased by 14% since October last year. At that time, renting was the cheaper option in just 40% of cities. Lawrence Hall, a spokesperson for Zoopla, urged caution when examining the findings of the study, stating that buying is a long-term investment, while renting in some areas of the country offers a short to medium term benefit. Hall added that buyers are likely to be better off over the average mortgage term of 25 years than individuals who rent.
Those in London benefit the most from renting rather than buying, although existing homeowners may have equity in their property, which may present an opportunity to pay a lower interest rate. CeMAP qualified mortgage advisers have the required knowledge of the local area to be able to advise first time buyers and existing homeowners.
