MARKET: Here’s where homes are cheaper to buy than rent, says Zoopla

Across the UK a third of homes for sale are cheaper to buy than rent, with the average first-time buyer saving £93 a month on a mortgage instead of renting.

A picture of the approach to Oadby and Wigston, a suburb of Leicester. zoopla

The Leicester suburb of Oadby and Wigston has been revealed by Zoopla as the UK key hotspot where homes are cheaper to buy than rent.

Across the UK a third of homes (150,000) for sale are cheaper to buy than rent in the same area, with the average first-time buyer saving £93 a month on a mortgage instead of renting.

URBAN AREAS

Zoopla found that whilst some regions have more affordable homes for first time buyers than others it’s most likely urban areas where buying is cheaper than renting.

Oadby and Wigston (main picture), a suburb of Leicester, has the largest proportion of for-sale homes (82%) with mortgage repayments lower than the local market rent. Ipswich in Suffolk comes second (80%) and North West Leicestershire (78%) comes third.

The famous arch bridge crossing over the River Tyne, Newcastle.
Newcastle

The majority of homes for sale in Newcastle (68%), Manchester (62%), Southampton (62%) and Sheffield (51%) are also cheaper to buy than rent thanks to an abundance of flats.

Assuming a 20% deposit a deeper analysis of homes listed on Zoopla found that first-time buyers can find 150,000 homes (34% of the total listed) where average monthly mortgage repayments are lower than rents.

Over two-fifths of homes for sale in the North East (48%), Scotland (46%) and North West (44%) are cheaper to buy than rent with the monthly difference between the cost of renting and buying in these areas ranging between £240 and £425.

LOCAL RENTS

But just a quarter (27%) of homes in the South West and a third (33%) of homes in the East Midlands have mortgage repayments lower than local rents.

Izabella Lubowiecka, Senior Property Researcher, Zoopla
Izabella Lubowiecka, Senior Property Researcher, Zoopla

And just two in five homes listed in London would have a lower mortgage repayment than the asking rent.

Izabella Lubowiecka, Senior Property Researcher at Zoopla, says: “First time buyers are an important source of demand for homes accounting for 36% of home buyers looking to move home in the next two years.

“While higher mortgage rates have reduced buying power, our data shows there are many areas of the country where home ownership is more accessible assuming the buyer has saved a 20% deposit.”


One Comment

  1. Surely you can’t ’assume A 20% deposit’ to make a fair comparison. When the market turned back in favour or buying rather than renting in the 1990’s we were comparing like for like. IE 100% mortgages vs rent. And buying was still cheaper because of the base rate reductions. Don’t know why lenders can’t start lending much higher percentage mortgages again now. They were fine if lenders had decent referencing standards.

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