There is now just £28 between the average monthly mortgage cost and rental payment, new Hamptons figures show.

Typical mortgage rates of just over 5% for a first-time buyer with a 10% deposit mean a mortgage of £1,328 is slightly cheaper than the average rent at £1,356.

Two years ago, as interest rates rose, renting became £48 per month cheaper than buying.

But for most of the last 40 years, it’s been cheaper to buy than rent.

Rising rates

Since January 1987, there have only been three occasions when renting has been cheaper than buying for someone purchasing a home with a 10% deposit over a 30-year mortgage term.

And during those three occasions, it was rising mortgage rates that pushed up the cost of buying rather than rents falling.

While nationally, the monthly cost of renting remains similar to the cost of buying today, the figures mask a north-south divide.

Economic shock

Aneisha Beveridge, Head of Research at Hamptons, says: “Since the 1980s, it’s typically taken an economic shock for renting to drop materially below the cost of buying.

“When this happens, it’s almost always driven by the cost of buying rising rapidly, pushed up by mortgage rates jumping for those with smaller deposits who are perceived to be riskier borrowers when prices may fall,” she says.

“But we are now seeing the impact of the inflation shock unwinding.

“Relative to the cost of paying a mortgage, rents tend to be much less volatile.  Typically, they’re tightly tied to both wages and inflation.”

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