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London is only British city where it is cheaper to rent than buy

8th December 2017

  • Glasgow is Britain’s top city for buyers – monthly mortgage payments are 57 per cent cheaper than rent
  • Outside the capital, renters fare best in Brighton and Cambridge
  • On average, homeowners pay £136.47 less per month than renters
  • Buying a property is cheaper than renting in 49 out of 50 of the biggest British cities*, according to the latest data from Zoopla. London is the only city where rental payments are lower than the monthly cost of servicing a mortgage.

    Zoopla researched the monthly cost of renting a two-bedroom flat compared to repaying a mortgage in Britain’s 50 biggest cities to find that on average renters in London are 16 per cent (£328) better off every month, compared to those who own a property. The average rental payment in the capital stands at £1,840 versus the average monthly mortgage repayment of £2,168.

    Homeowners in the North of England and Scotland typically fare the best. Glasgow tops the list of locations where monthly mortgage repayments are cheaper than rent. Glaswegians’ average mortgage payments stands at 57 per cent (£298) cheaper than monthly rent. This is followed by Bradford and Dundee where servicing a mortgage is 53 per cent (£207) and 52 per cent (£225) cheaper than renting a property respectively. The northern towns of Middlesbrough, Doncaster, Barnsley and Warrington also feature in the top 10.

    Comparing rental and mortgage payments outside of the capital, the monthly costs are almost level in Brighton and Cambridge. There is very little difference – just one per cent – between the cost of renting and buying in these two commuter hotspots.

    Nationally, across Britain’s 50 biggest cities, the average monthly mortgage payment for a two-bedroomed flat stands at £564 – £136.47 less than the £700.47 average rent payment (assuming an 85 per cent LTV mortgage and an average asking price of £149,539.

    Further research from Zoopla suggests that these figures are reflected in the sentiment of renters. Its recent State of the Property Nation report found that 67 per cent of renters believe rates will rise over the next year, an increase of five per cent since 2016. In addition, 57 per cent of estate agents are predicting an increase in the number of renters joining the market, however, only 30 per cent think more rental properties will come available to meet this demand.

    Lawrence Hall, spokesperson for Zoopla, comments: “These figures demonstrate that renters across Britain are paying a premium compared to homeowners servicing a mortgage. Now only London appears a preferable city for renting. However, the recent announcement of a rise in threshold for the stamp duty tax may encourage more first-time buyers on to the market, so it will be interesting to see whether this boost for first time buyers impacts property prices in the near future.”

    Top 10 locations where mortgage repayment is cheaper than renting

    Rank

    Location

    Median Monthly Rent

    Median Asking Price

    Average monthly mortgage repayment (based on 85% LTV)

    Rental Premium

    1

    Glasgow

    £675

    £99,950

    £377

    57%

    2

    Bradford

    £497

    £76,975

    £290

    53%

    3

    Dundee

    £545

    £85,000

    £320

    52%

    4

    Middlesbrough

    £497

    £80,000

    £302

    49%

    5

    Coventry

    £749

    £125,000

    £471

    46%

    6

    Doncaster

    £497

    £85,000

    £320

    43%

    7

    Walsall

    £523

    £90,000

    £339

    43%

    8

    Birmingham

    £792

    £140,000

    £528

    40%

    9

    Barnsley

    £424

    £75,000

    £283

    40%

    10

    Warrington

    £593

    £105,000

    £396

    40%

    Source: Zoopla, November 2017

    - 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
    Data Protection number: Z9972266

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