Friday, 18 April 2014

Report claims renting is more expensive than buying

Renting a home is more expensive than buying in eight out of 10 homes across the country, a new survey claims.

Property website Zoopla said it was cheaper to buy a home in four in five of the 50 largest towns and cities throughout the UK.

The research, which showed the average cost of renting was 9.7 per cent higher than the cost of owning, looked at the current asking prices and rents of two-bedroom flats and assumed interest-only mortgage payments of 5 per cent per annum.

Milton Keynes was the top place in the country where average rents exceeds the cost of servicing a mortgage by 43 per cent.

Renters in Milton Keynes will be on average £2,964 per year worse off compared to owners.

Poole was the location where renting was much more economical than buying with the average tenant saving £3,240 a year buy renting instead of owning.

Nicholas Leeming, business development director of Zoopla.co.uk, said: ‘The relative cost of renting as opposed to buying has increased over the past 12 months as rents have risen and house prices and interest rates have remained flat.

‘Almost 750,000 would-be first-time buyers have reluctantly ended up as renters over the past 3 years as a result of being unable to get a mortgage.’

Top 10 locations where renting beats buying

RankLocationAvg. Asking Price*Avg. Monthly Rent*Rent vs Buy**
1Poole£243,466£744-27%
2Plymouth£157,134£573-12%
3Stockport£145,502£558-8%
4Oldham£122,716£477-7%
5Bristol£188,893£753-4%
6Huddersfield£123,538£497-4%
7Bournemouth£183,225£745-2%
8Lincoln£126,470£519-1%
9Swansea£169,773£702-1%
10Cardiff£157,610£6560%

Top 10 locations where buying beats renting

RankLocationAvg. Asking Price*Avg. Monthly Rent*Rent vs Buy**
1Milton Keynes£137,800£82143%
2Birmingham£127,127£72737%
3Warrington£108,410£58229%
4York£162,645£87729%
5Northampton£109,167£57927%
6Coventry£107,363£57027%
7Bradford£96,281£49924%
8Preston£107,052£54923%
9Peterborough£109,456£55121%
10Barnsley£431,366£2,13719%

Readers' comments (24)

  • Hmmm. My willingness to accept this as a credible piece of research was immediately quashed by the suggestion that the Average asking price in Barnsley is £431,366 and Avg. Rents are £2,137 per month!

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  • Eric Blair

    I live in one of the above cities, and I pay less than 50% of the average rent cited for that place. Those figures are complete tosh! There's no need to pay high rents if you shop around, though of course that situation could change.

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  • "assumed interest-only mortgage payments of 5 per cent per annum."

    and the final payment at the end of the term will come from where exactly? idiot research.

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  • Melvin Bone

    Eric I thought you lived in a box?

    Could you not buy Barnsley lock, stock and barrel for £431,366?

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  • Eric Blair

    @ Melvin - You're right I do.

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  • Rosa Hooses

    Equally stupid is basing it on 2-bed flats only.

    The average age of a first time buyer is apparently 37, so there must be a fair few first time buyers who need a place with room for a family.

    And anyway unless house prices are rising, interest only mortgage payments are effectively the same as renting!

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  • Rick Campbell

    I seem to remember the BBC News website claimed that Prince William on his £37k pa salary could not afford a mortgage for a house around £140,000 (allegedly the average cost -- certainly not here in leafy Cheshire).

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  • Peter Wicks

    "They" sold the roof over my head for just over £8k per property and the sick HA (who were our "in house" HA in the beginning run by the local council) Now this "not for profit" shower are asking those who want to buy £150k (less a little discount) for something that was never offered to the tenant in the first place and never went out to tender either.

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  • Peter Wicks

    "If you want a picture of the future, imagine a boot stamping on a human face--for ever."

    --from Nineteen Eighty-Four

    Written by Eric Blair......ye gods is that you George Orwell ?

    Big Brother 1984?


    Our freedoms going, one by one
    We are clueless of what’s going on
    A “Supergrass” down every street
    Friends and neighbours dare not speak


    Surveillance cameras in every road
    Our civil liberties they erode
    You dare not think or talk aloud
    When the “Thought Police” are around


    “They” want your genes, your DNA
    On the biggest computer of the day
    “They” want the profile of everyone
    To point a finger or a gun!


    There’s a Satellite camera in the sky
    Tracking our movements until we die
    Those George Orwell days of 84
    Are fact not fiction anymore
    Wake up my friends, before it’s too late
    Before we become the “Big Brother State”

    Peter Wicks 1984....

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  • Progressive Solutions Required

    The obvious solution to both over expensive options tested is social rent - always affordable and better than option P or O.

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