Cost of renting continues to rise

Cost of renting continues to rise

cost of a home

Property website Zoopla.co.uk has claimed that the cost of home ownership is cheaper than renting in 42 of the top 50 towns and cities in Britain.

This represents 84% of towns and cities and compares with 2011 when it was cheaper to service a mortgage rather than pay rent in 80% of towns across the country.

It now costs 14% more per month on average to rent a home compared to servicing a mortgage on an equivalent property.

The average rent across Britain now stands at £1,785 per calendar month, up 2.7% since February. Milton Keynes, Dundee and Stoke-on-Trent top the list of places where owning beats renting by a large margin. At the other end of the spectrum, in Aberdeen, Bournemouth and Swansea renting is by far the better option from a cost perspective.

In London, renting is 21% more costly on average than servicing a mortgage with the average asking price for a 2-bedroom flat in the capital currently at £474,979 and the average rent on an equivalent property at £2,500 per month. With an interest-only mortgage at 5% p.a., owners are £6,250 per year better off than renters in the capital.

“The climbing cost of renting is exacerbating the problems the property market currently faces,” explained Nicholas Leeming of Zoopla.co.uk.

“Higher rental costs leave less disposable income for renters to save for deposits. The problem will only ease if rental prices fall or mortgage availability improves dramatically, leaving the ball is firmly in the court of Britain’s lenders.”