London is the only city in the UK where renting out a flat is cheaper than buying a property and making the mortgage payments on it, research has shown. Buying a property is cheaper than renting in 49 out of 50 largest British cities. Renters in London pay £1,840 versus the average monthly mortgage repayment of £2,168 – a £328 gap. Outside the capital, the renters who fare the best dwell in Brighton and Cambridge. However, there is a measly 1% difference between renting and buying when looking at these two places! As there’s little difference here, buying is likely the best option for those looking for somewhere new to live.
However, when looking at all of the cities in the study collectively, the average monthly mortgage payment for a 2 bedroom flat was anywhere from £564 and £136.47 less than the £700.47 average rent payment. These numbers are based on an 85 percent loan-to-value mortgage with an average asking price of £149,539. As a national average, homeowners tend to pay £136.47 less per month than renters.
Rent was found to be £1,861 on average per month in the capital, while a mortgage repayment could set a homeowner back by £3,001 a month on 2 bedroom properties, according to research carried out by Zoopla. Rents continue to dip in the London area, but are hitting an astonishing 3 year high across the rest of Britain. 57% of estate agents predict an increase in the number of renters that will join the market next year, while just 30% think more rental properties will be available to meet the demand. A huge 67% of renters think that rates will rise over the next year, which will mean a 5% increase since the year 2016.
When exploring all cities as an option, Glasgow is actually Britain’s top city for buyers. Here, monthly mortgage payments are a massive 57% cheaper (£298) than renting. Bradford and Dundee come next, with a 53% (£207) cheaper mortgage than renting property. Homeowners in the North of England and Scotland typically get the best deals. The Northern towns of Middlesbrough, Doncaster, Barnsley and Warrington are also in the top 10. If you live in any of these places, you can expect buying to continue to be a more affordable option than renting for the foreseeable future.
Where are the most affordable London boroughs for renters?
Perhaps you’re now wondering where the most affordable London boroughs for renters are. Here’s a list, in order:
- Bexley £1,007
- Havering, £1,083
- Barking and Dagenham, £1,162
- Sutton, £1,166
- Bromley, £1,271
- Enfield, £1,285
- Redbridge, £1,293
- Croydon, £1,309
- Waltham Forest, £1,309
- Hillingdon, £1,311
This information might put some people off buying in London. London, as with any capital, is already a much more expensive city to spend time in, whether living there or renting. Hopefully, these figures give you an idea of the best place to go for your budget.