Zoopla’s findings were based on two bed homes currently on the market. The research analysed both purchase asking prices and rents and found that renting works out more expensive than buying in many parts of Scotland, Norther England and the West Midlands.
Top 10 cities where it’s more cost effective to buy than rent
According to Zoopla’s findings those renting in Glasgow, Coventry and Birmingham could be paying more than £100 a month more than those paying for a mortgage on a similar home. However in the South, where demand for property outstrips supply, those renting were more likely to be better off than those paying a mortgage. Brighton, Cambridge and London are the places where renting is more cost effective than repaying a mortgage.
Top 10 cities where renting beats buying
Zoopla’s spokesman, Lawrence Hall, said: “Once you get past the initial fees that come with a house purchase, such as a deposit and stamp duty, our figures show that it can pay to try and get on the property ladder.
“On top of the enjoyment that can come with owning your property, buyers may also find themselves with more disposable income at the end of the month than those renting their homes.
“Particularly if you’re in Scotland, northern England or in the West Midlands, taking the first step on to the ladder and sacrificing the flexibility of renting can be a much cheaper alternative.”
Zoopla’s research assumed that someone buying a home had a 10% deposit and was paying a 25-year repayment mortgage with an interest rate of 4.5%.
When the data was last analysed by Zoopla in October 2015, buying was cheaper than renting in just over one third of cities.