According to new data released by property website Zoopla, it is now cheaper to rent a property in a British city as opposed to buying one.
Zoopla analysed the monthly cost of renting a two-bedroomed home, compared to servicing a mortgage, in the country’s 50 largest cities and found that the places where it is cheaper to rent than buy has risen by 14% since October 2016. The average monthly rental payment on a two-bedroom home is currently £690, £47 less per month than average mortgage repayments which sits at £737. Back in October, it was more cost effective for home seekers to buy in 60% of British cities.
It suggests that house prices may approaching a peak, most notably in London and areas of the South East where properties are generally of a higher value.
It is thought that buy prices have risen due to a number of factors, including low interest rates and government schemes to help people with housing deposits.
Lawrence Hall, a spokesperson for Zoopla, explain: “It is important to remember that whilst renters may be better off in the short to medium term in some areas of the country, buying a property is a long-term investment.
“With most buyers opting for mortgage terms of 25 years, buyers are likely to be better off overall compared to those who choose to rent.”