Buying property is a more attractive prospect than renting which is now 15% more expensive than owning in most towns in the UK, according to research.
Swansea, Plymouth and Bournemouth are the only places where renting is cheaper and in London renters end up paying $6,888 a year more than a home owner, the report from property website Zoopla has found.
Buying now beats renting in 47 of the 50 largest towns across the country, an 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% per annum.
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 two 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.
‘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,’ said spokesman Nicholas Leeming.