LONDON, December 21, 2011 /PRNewswire/ --
- Buying property more attractive than it has ever been compared to renting
- Renting now 15% more expensive than owning on average across Britain
- Swansea, Plymouth and Bournemouth only places where renting rules
- Renters in London pay £6,888 p.a more on average than homeowners
High rental demand, due to the difficulties would-be buyers face in getting financing, coupled with low mortgage rates has made buying property in Britain more attractive today than it has ever been in comparison to renting. Buying now beats renting in 47 of the 50 largest towns across the country, according to the latest statistics from property website Zoopla.co.uk.
The Rent vs. Buy Index shows a significant increase on this time last year, when it was better to buy than find a house or flat to rent in only 40 out of the same 50 towns. The continued mortgage drought and the rising demand for rental properties has led to renting now costing 15% more on average than buying, up from only 10% more this time last year.
To compare the cost of buying versus renting, Zoopla analysed the current asking house prices and rents of over 78,000 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.
Swansea, Plymouth and Bournemouth are the only 3 locations on the list of 50 towns where it remains cheaper to rent than buy today. In contrast, Milton Keynes comes top of the list of locations where buying beats renting and where renting is 36% more expensive than owning, leaving renters £2,436 per year worse off on average. Warrington and Walsall also feature highly on the list of locations where it is cheaper to buy than rent, at 33% and 32% rental premiums respectively.
In London, where the average asking price for 2-bedroom flats currently stands at £442,036, buying also trumps renting by a big margin. With average monthly rents in the capital at £2,416, renting is 31% more expensive than the cost of ownership, leaving renters paying an extra £6,888 annually on average compared to owners.
Nicholas Leeming of Zoopla.co.uk, said: "Although buying may be more cost-effective than ever compared to renting, many potential buyers aren't able to take advantage because they can't access mortgage finance for their new homes. The shortage of financing, especially to first time buyers, has pushed demand for rental property through the roof. But for those lucky enough to be in a position to get a mortgage, there may never have been a better time to buy."
Full list of the top 50 locations: http://www.zoopla.co.uk/rentbuy
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, led by Founder and CEO, Alex Chesterman, and backed by well-respected angel investors and leading venture capital firms Atlas Venture and Octopus Ventures.