Thu 01 Jun 2017
Those living in many cities throughout the UK will now find that renting property is cheaper than buying it, according to new data. Zoopla has found that in more than half of Britain's largest cities, it is cheaper to pay rent for a two-bedroom property than it is to pay the mortgage on one. The findings suggest that house prices may be reaching their peak, with the number of locations where it is cheaper to rent than buy increasing by 14 per cent since October 2016. At this time, it was more cost effective to buy than it was to rent in around 60 per cent of the UK's cities, showing a huge shift. Zoopla's findings reveal that the average monthly rent payable on a two-bedroom property in the 50 biggest cities in the UK is around £690. In comparison, mortgage repayments are, on average, £47 per cent higher at £737. The higher costs of properties in areas like London and the South East suggest that housing prices could well have reached their peak, which could mean a future fall. Property prices when purchasing have been driven up by renewed interest in the market thanks to a long period of low interest rates and government schemes to provide aid to those needing a mortgage deposit. Mortgage repayments are likely to become more expensive too, with any rise above the recent lows making them less affordable. Spokesperson for Zoopla, Lawrence hall said: “It is important to remember that whilst renters may be better off in the short to medium term in some areas of the country, buying a property is a long-term investment. With most buyers opting for mortgage terms of 25 years, buyers are likely to be better off overall compared to those who choose to rent.” However, on a regional level, Zoopla found that in highest-value areas, rents are still the cheaper option when compared to mortgage repayments.
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