Increase is property prices makes renting cheaper for the first time in 6 years
For the first time in six years, it's finally cheaper to rent a property than buy in most areas of the UK, thanks to soaring house prices.
It is now £71 per month cheaper to rent than buy on average across the UK for the first time since 2014.
Research from estate agency group, Hamptons, shows that on the eve of the first lockdown in March 2020, it was more affordable to buy than rent in every region of the country, with the average buyer being £102 per month better off.
By May 2021, that’s only the case in four out of Great Britain’s 11 regions – Yorkshire and Humber, North West, North East and Scotland – with seven areas being cheaper for renters rather than homeowners.
This is despite rents reaching an all-time high.
The combination of soaring house prices and an increase in higher loan-to-value mortgage rates throughout the pandemic means a purchaser with a 10% deposit will now pay out less in rent (£1,054) on a monthly basis compared to a mortgage (£1,125).
London has seen the largest shift since the start of the pandemic with falling rents making renting cheaper relative to buying by a bigger margin than anywhere else. A buyer putting down a 10% deposit on a property in the capital will have gone from being £123 per month better off buying in March 2020 to spending £251 per month less on rent in May 2021.
The findings are closely echoed by those of home interior specialists www.hillarys.co.uk, whose new online tool has revealed the most affordable postcodes to buy in the UK.
The calculator allows users to enter any postcode and/or town or city name in order to find out how much they’d need to earn per hour to be able to buy a property in that given location based on up to date house prices.
Out of 2,602 postcodes in the UK, the tool suggests that G34 in Glasgow is the most affordable, with those looking to buy in that location having to earn just £2.36 per hour. In comparison, N2 in London tops the charts as the least affordable, with buyers needing to earn a staggering £292.29 per hour.