Private House Renters Central Housing Group

Renting now cheaper than buying, new research shows

It is now cheaper to rent a home than buy one – the first time this has been the case since late 2014.

An analysis by the Connells-owned Hamptons agency says that in May the average tenant in Britain spent £71 per month less in rent than if they were servicing the repayments on a 90 per cent loan-to-value mortgage on the same home.

This means they would have spent a monthly average of £1,054 on rent compared to £1,125 on mortgage repayments.
This is a switch-around to the position just before the pandemic.

In March 2020 a buyer with a 10 per cent deposit would have been £102 per month better off buying.

Hamptons says that right now there are only four regions in Britain where it is cheaper to buy than rent – the North East, North West, Yorkshire & Humber and Scotland.

Despite rents across Britain rising by an average 7.1 per cent over the last 12 months, strong house price growth coupled with increases in higher loan-to-value mortgage rates have added to the cost of buying and owning a home.

London has seen the largest shift since the start of the pandemic.

A buyer putting down a 10 per cent deposit on a property in the capital will have gone from being £123 per month better off buying in March 2020, to spending £251 per month less on rent in May 2021.

Falling rents in the capital have made renting cheaper relative to buying by a bigger margin than anywhere else. And Hamptons says that with rents still falling, the differential looks set to continue growing.

For buyers with just a five per cent deposit, renting becomes even cheaper than buying on a monthly basis.

This is in part due to the increase in interest rates on 95 per cent LTV mortgages over the course of the pandemic.  A buyer  putting down a five per cent deposit will on average spend £195 per month more than if they had carried on renting.

Blog Post from Letting Agent Today

See details of our Guaranteed Rent Scheme here

If you have any comments, please email the author of this article and click on the link above

Generic selectors
Exact matches only
Search in title
Search in content



Registered Office: Woodgate Studios, 2-8 Games Road, Cockfosters, Hertfordshire, EN4 9HN | Registered in England and Wales | Registered Company No. 3961047 | VAT Registration No. 752 6015 48

 

Social Media Auto Publish Powered By : XYZScripts.com