LONDON, September 29, 2011 /PRNewswire/ --
Falling house prices and increasing rental demand has made it cheaper to buy a property than to rent one in 45 of the 50 largest towns across Britain. The cost of renting is now 13% higher on average than the cost of owning, according to the latest research from property website Zoopla.co.uk.
Zoopla.co.uk, which lists over half a million properties for sale or to rent in Britain, analysed the asking prices and rents for all 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% p.a.
Milton Keynes topped the list of locations where buying beats renting with current rents more than 39% higher than the cost of owning, leaving renters on average £2,544 per year worse off. At the other end of the scale, renting remains more cost-effective in Aberdeen, where it costs 9% more to own compared to rent, leaving owners on average £936 worse off.
In London, where the average asking price for 2-bedroom flats currently stands at £430,608, buying still beats renting a home by a significant margin. The average monthly rent in the capital today is 28% higher than the cost of ownership, leaving renters paying an extra £5,964 annually compared to owners.
Nicholas Leeming of Zoopla.co.uk, said: "With house prices down, low interest rates and sky high demand in the private rental sector, buying has never been a better option for those able to secure a mortgage. And with owners reducing prices further in order to achieve a sale before Christmas, there may well not have been a better time to buy in recent times."
Full list of the top 50 locations: http://www.zoopla.co.uk/rentbuy
- Mortgage payments are calculated assuming a conservative mortgage rate of 5% p.a. to provide an effective comparison to renting.
- We use an interest-only mortgage rate in the comparison as the interest on a mortgage is the effective cost of financing living in that home.
- We assume a 100% LTV ratio to do a fair and simple comparison of the cost of financing versus the cost of rent.
Zoopla.co.uk (http://www.zoopla.co.uk) is the UK's most comprehensive property website, focused on empowering consumers with the resources they need to make better-informed property decisions. We help our users make sense of the residential property market by combining property listings with market value data, local information and community tools.
Zoopla.co.uk was founded on the principles of transparency and efficiency and everything we do aims to make the market more effective for both property consumers and professionals alike. By combining free, instant value estimates for every UK home with sold prices, local market information and hundreds of thousands of properties available for sale and to rent, Zoopla.co.uk has rapidly become the ultimate destination for property consumers to search for property and do their market research. Our unique features allow users to gain an insight into the market and discover information they won't find anywhere else. And, as a result, we have become one of the most valued sources of both applicant and vendor leads for UK estate agents.
Launched in 2008, we are the fastest growing property website in the UK, now attracting over 10 million visits per month and are proud to have been awarded numerous accolades including being listed in the Top 10 UK Tech Companies (Guardian) and the Top 10 Most Innovative UK Companies (Smarta 100) as well as being voted the UK's Best Property Portal (Web User, Daily Mail Awards, Website of the Year).
Zoopla Ltd is a privately held company with a highly experienced and proven management team, backed by well-respected angel investors and leading venture capital firms Atlas Venture and Octopus Ventures.