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Cheaper to buy than rent in nearly two thirds of British cities

30th October 2016

  • Mortgage repayments less expensive than monthly rent in 60 per cent of British cities
  • Number of cities where buying is more cost-effective than renting has risen by 25 per cent since April
  • Buying offers better value in Glasgow, Birmingham and Bradford where homeowners are more than £100 per month better off than renters
  • In the South, renting continues to be more cost-effective than buying, with property owners in London, Cambridge and Bournemouth paying hundreds more per month
  • Across Britain, renters still pay an average of £40 less per month than buyers
  • Buying a home is now more cost-effective than renting in nearly two thirds (60 per cent) of British cities, according to new research from leading property website Zoopla.

    Zoopla researched the monthly cost of renting a two-bedroom home compared to servicing a mortgage in Britain’s 50 biggest cities* and found that it is becoming increasingly more cost-effective to invest in property. The proportion of cities that offer better value for money for homeowners has seen a 25 per cent increase since April, when the data was last analysed.

    Homeowners fare particularly well in Glasgow where mortgage repayments are currently 28 per cent cheaper than rental payments. Mortgage payers here part with an average of £450 per month, while renters fork out an average of £596 – a difference of £146, or 28 per cent. Meanwhile, Birmingham takes second place with homeowners paying 24 per cent less per month (£176) than renters. This is followed by West Yorkshire’s Bradford, where homeowners pay 23 per cent less per month than those renting a property, a difference of £103.

    In contrast, cities in the South of Britain typically offer much better value for renters. London has overtaken Cambridge and currently tops the list of cities where renting is more affordable than buying, with monthly rental bills coming to £2,009 – 44 per cent (£1,118) cheaper than the average monthly mortgage repayment. The Capital is closely followed by increasingly popular commuter city, Cambridge, which has a 38 per cent (£549) difference and seaside hotspot Bournemouth, where monthly rental bills are 28 per cent (£274) less than the monthly cost of a mortgage.

    However, across all of Britain’s 50 biggest cities, renters still pay an average of £40 less per month than owners. The current average monthly rent for a two-bedroom home is £714, which comes in lower than the average monthly mortgage repayment cost of £754. This assumes a 90 per cent LTV mortgage and the average asking price of a two-bedroom home in these cities being £150,796.

    Lawrence Hall, spokesperson for Zoopla comments: “Buying a property is a costly process, but once you get past the initial fees, it can – as our data shows – prove a more economical option on a monthly basis. Although large parts of Britain remain unaffordable for those looking to take their first steps onto or another step up the property ladder, these latest figures tell an encouraging story. Whereas back in April it was cheaper to service a monthly mortgage than pay a rental fee in just under half of Britain’s biggest cities, buyers are now offered better value in nearly two thirds of these locations.”

    Top 10 locations where buying beats renting

    Rank Location Median Monthly Rent Median Asking Price Avg. Monthly Mortgage Repayment (based on 90% LTV) Rental Premium
    1 GLASGOW £596 £89,995 £450 28%
    2 BIRMINGHAM £826 £130,000 £650 24%
    3 BRADFORD £500 £79,450 £397 23%
    4 COVENTRY £804 £129,995 £650 21%
    5 NOTTINGHAM £696 £115,000 £575 19%
    6 DUNDEE £526 £89,500 £448 16%
    7 BARNSLEY £452 £79,950 £400 12%
    8 MIDDLESBOROUGH £500 £88,500 £443 12%
    9 LEEDS £704 £125,000 £625 12%
    10 PETERBOROUGH £696 £124,995 £625 11%

    Top 10 locations where renting beats buying

    Rank Location Median Monthly Rent Median Asking Price Avg. Monthly Mortgage Repayment (based on 90% LTV) Buying Premium
    1 LONDON £2,009 £625,000 £3,127 44%
    2 CAMBRIDGE £1,152 £340,000 £1,701 38%
    3 BOURNEMOUTH £852 £225,000 £1,126 28%
    4 ABERDEEN £726 £184,995 £925 24%
    5 BRIGHTON £1,218 £300,000 £1,501 21%
    6 READING £1,104 £270,000 £1,351 20%
    7 BEDFORD £804 £195,000 £975 19%
    8 LIVERPOOL £626 £150,000 £750 18%
    9 COLCHESTER £752 £169,995 £850 12%
    10 SOUTHAMPTON £804 £180,000 £900 11%
    Source: Zoopla, October 2016

    - Ends -

    For further information, please contact PR Team on pr@zoopla.co.uk or +44 (0)20 3873 8770.

    About Zoopla

    Hello. We're Zoopla. A property website and app.

    We know you're not just looking for a place to live. You're looking for a home.

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    But we know you're looking for more than that.

    Because that first flat won't just be a 'great investment opportunity'.

    It'll be the feeling of starting out on your own.

    That extra bedroom won't just mean another £20K on the re-sale price, it'll mean having your sister over to stay.

    And that bungalow won't just be a way to release some equity, it will be a chance to spend more time with the grandkids.

    We know that searching for a home is about more than just checking its price, location and features (important as all those things are).

    What really matters is how it makes you feel.

    We know what a home is really worth.

    So let us help you find yours.

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