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Buying beats renting in 94% of UK towns

15th December 2011

  • Buying property more attractive than it has ever been compared to renting
  • Renting now 15% more expensive than owning on average across Britain
  • Swansea, Plymouth and Bournemouth only places where renting rules
  • Renters in London pay £6,888 p.a more on average than homeowners

High rental demand, due to the difficulties would-be buyers face in getting financing, coupled with low mortgage rates has made buying property in Britain more attractive today than it has ever been in comparison to renting. Buying now beats renting in 47 of the 50 largest towns across the country, according to the latest statistics from property website Zoopla.co.uk.

The figures show a significant increase on this time last year, when it was better to buy than rent in only 40 out of the same 50 towns. The continued mortgage drought and the rising demand for rental properties has led to renting now costing 15% more on average than buying, up from only 10% more this time last year.

To compare the cost of buying versus renting, Zoopla analysed the current asking prices and rents of over 78,000 two-bedroom flats currently on the market, comparing the rental cost to the cost of ownership based on servicing an interest-only mortgage at 5% p.a.

Swansea, Plymouth and Bournemouth are the only 3 locations on the list of 50 towns where it remains cheaper to rent than buy today. In contrast, Milton Keynes comes top of the list of locations where buying beats renting and where renting is 36% more expensive than owning, leaving renters £2,436 per year worse off on average. Warrington and Walsall also feature highly on the list of locations where it is cheaper to buy than rent, at 33% and 32% rental premiums respectively.

In London, where the average asking price for 2-bedroom flats currently stands at £442,036, buying also trumps renting by a big margin. With average monthly rents in the capital at £2,416, renting is 31% more expensive than the cost of ownership, leaving renters paying an extra £6,888 annually on average compared to owners.

Nicholas Leeming, business development director of Zoopla.co.uk, commented: “Although buying may be more cost-effective than ever compared to renting, many potential buyers aren’t able to take advantage because they can’t access mortgage finance. The shortage of financing, especially to first time buyers, has pushed demand for rental property through the roof. But for those lucky enough to be in a position to get a mortgage, there may never have been a better time to buy.”

Full list of the top Zoopla.co.uk 50 rent/buy locations

Locations where renting rules over buying

Rank Location Avg. Monthly Rent* Avg. Asking Price* Rental Discount**
1 Swansea £653 £172,871 -9.3%
2 Plymouth £618 £158,693 -6.6%
3 Bournemouth £756 £192,456 -5.7%

Source: Zoopla.co.uk

* Based on 2 bedroom flats on the market for sale/rent in November 2011

** % variance between average monthly rent and average monthly cost of 5% p.a. interest-only mortgage

Top 10 locations where buying beats renting

Rank Location Avg. Monthly Rent* Avg. Asking Price* Rental Premium**
1 Milton Keynes £756 £133,217 36%
2 Warrington £601 £108,604 33%
3 Walsall £507 £92,031 32%
4 Coventry £582 £105,850 32%
5 Northampton £587 £106,925 32%
6 York £866 £158,127 31%
7 London £2,416 £442,036 31%
8 Wolverhampton £505 £92,590 31%
9 Swindon £597 £110,574 30%
10 Birmingham £706 £130,937 29%

Source: Zoopla.co.uk

* Based on 2 bedroom flats on the market for sale/rent in November 2011

** % variance between average monthly rent and average monthly cost of 5% p.a. interest-only mortgage

- 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.

Yeah, we've got over a million properties for you to browse.

Tools that let you filter them in all kinds of clever ways.

And reliable house price estimates, so you can be sure you aren't paying over the odds.

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.

Zoopla is part of Zoopla Limited which was founded in 2007.

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