Despite the fall over the last quarter, buying remains cheaper than renting today across the vast majority of the country and it is cheaper to buy now than rent in more locations than at the same time last year. The shortage of mortgages and difficulties faced by first-time buyers in securing a deposit has increased demand for rental property and led to renting in Britain now costing 16% more on average than buying, up from 11% this time last year.
The average monthly rent in Britain has come down slightly by £9 on average over the past 3 months to £1,470 per month in February 2012. Meanwhile asking prices have dropped by £6,500 on average over the same period to £255,037.
Swansea, Oldham and Cambridge top the list of places where it currently still pays to rent rather than buy with rental discounts ranging from 4.6% to 8.4%. In contrast, it make most sense to buy in Milton Keynes where renting is 38.8% more expensive than servicing a mortgage, leaving renters £2,580 per year worse off on average. York and Preston also offer buyers better deals to buy than rent with renters paying around a third more on average in both places.
In London, despite the high cost of buying, it still beats renting with the average asking price for a 2-bedroom flat in the capital currently at £452,387, while the average rent for an equivalent property is £2,422 per month, making renting 29.6% more expensive than owning on average.
Nicholas Leeming of Zoopla.co.uk, said: “Despite a recent increase in first-time buyer activity, demand from remains strong and is keeping rental levels at historic highs. This, along with historically low borrowing costs, makes it as good a time to buy as it ever has been. However many buyers are still unable to take advantage of these conditions because of their inability to secure a mortgage.”
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