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Buying beats renting in 94% of UK towns

15th December 2011

  • Buying property more attractive than it has ever been compared to renting
  • Renting now 15% more expensive than owning on average across Britain
  • Swansea, Plymouth and Bournemouth only places where renting rules
  • Renters in London pay £6,888 p.a more on average than homeowners

High rental demand, due to the difficulties would-be buyers face in getting financing, coupled with low mortgage rates has made buying property in Britain more attractive today than it has ever been in comparison to renting. Buying now beats renting in 47 of the 50 largest towns across the country, according to the latest statistics from property website Zoopla.co.uk.

The figures show a significant increase on this time last year, when it was better to buy than rent in only 40 out of the same 50 towns. The continued mortgage drought and the rising demand for rental properties has led to renting now costing 15% more on average than buying, up from only 10% more this time last year.

To compare the cost of buying versus renting, Zoopla analysed the current asking prices and rents of over 78,000 two-bedroom flats currently on the market, comparing the rental cost to the cost of ownership based on servicing an interest-only mortgage at 5% p.a.

Swansea, Plymouth and Bournemouth are the only 3 locations on the list of 50 towns where it remains cheaper to rent than buy today. In contrast, Milton Keynes comes top of the list of locations where buying beats renting and where renting is 36% more expensive than owning, leaving renters £2,436 per year worse off on average. Warrington and Walsall also feature highly on the list of locations where it is cheaper to buy than rent, at 33% and 32% rental premiums respectively.

In London, where the average asking price for 2-bedroom flats currently stands at £442,036, buying also trumps renting by a big margin. With average monthly rents in the capital at £2,416, renting is 31% more expensive than the cost of ownership, leaving renters paying an extra £6,888 annually on average compared to owners.

Nicholas Leeming, business development director of Zoopla.co.uk, commented: “Although buying may be more cost-effective than ever compared to renting, many potential buyers aren’t able to take advantage because they can’t access mortgage finance. The shortage of financing, especially to first time buyers, has pushed demand for rental property through the roof. But for those lucky enough to be in a position to get a mortgage, there may never have been a better time to buy.”

Full list of the top Zoopla.co.uk 50 rent/buy locations

Locations where renting rules over buying

Rank Location Avg. Monthly Rent* Avg. Asking Price* Rental Discount**
1 Swansea £653 £172,871 -9.3%
2 Plymouth £618 £158,693 -6.6%
3 Bournemouth £756 £192,456 -5.7%

Source: Zoopla.co.uk

* Based on 2 bedroom flats on the market for sale/rent in November 2011

** % variance between average monthly rent and average monthly cost of 5% p.a. interest-only mortgage

Top 10 locations where buying beats renting

Rank Location Avg. Monthly Rent* Avg. Asking Price* Rental Premium**
1 Milton Keynes £756 £133,217 36%
2 Warrington £601 £108,604 33%
3 Walsall £507 £92,031 32%
4 Coventry £582 £105,850 32%
5 Northampton £587 £106,925 32%
6 York £866 £158,127 31%
7 London £2,416 £442,036 31%
8 Wolverhampton £505 £92,590 31%
9 Swindon £597 £110,574 30%
10 Birmingham £706 £130,937 29%

Source: Zoopla.co.uk

* Based on 2 bedroom flats on the market for sale/rent in November 2011

** % variance between average monthly rent and average monthly cost of 5% p.a. interest-only mortgage

- Ends -

For further information, please contact Tim Vooght at pr@zoopla.co.uk or on 020 3872 5615.

Notes to editors

Zoopla is the UK's most comprehensive property website, focused on empowering users with the resources they need to make better-informed property decisions. We help consumers both find their next home and research the market by combining hundreds of thousands of property listings with market data, local information and community tools.

At Zoopla we are fans of transparency and everything we do is aimed at making the market more efficient for both property consumers and advertisers alike. Zoopla has rapidly become the UK’s leading online destination for property consumers to search for homes and do their market research and the favoured online marketing partner for UK estate agents, letting agents and property developers.

Launched in 2008, Zoopla has since been one of the fastest growing websites in the UK, now attracting over 40 million visits per month and we are proud to have collected numerous awards and accolades along the way, including being named one of the Top 10 UK Tech Companies (Guardian) and one of the Top 10 Most Innovative UK Companies (Smarta).

Zoopla is part of Zoopla Limited which was founded in 2007.

Zoopla Limited, The Cooperage, 5 Copper Row, London, SE1 2LH
Registered in England and Wales with Company No. 09005884
VAT Registration number: 191 2231 33
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