The cost of mortgages in 42 out of the top 50 cities and towns in Great Britain are cheaper than renting, reported property website Zoopla.co.uk. However, this figure is slightly lower than three months ago when it was 47 out of 50 cities and towns.
In spite of the slight fall, buying continues to be cheaper than renting in most parts of the country. The difficulty faced by first-time buyers in securing a deposit for a mortgage, as well as the shortage of home loans has boosted demand for rental properties. This also made renting 16 percent more expensive than buying, up 11 percent from last year.
Even with the high property prices in London, buying is still cheaper than renting. The average rent for a two-bedroom flat in the city is presently £2,422 (S$4,813) per month, while the average asking price for an equivalent property is £452,387 (S$899,076). This implies that renting is 29.6 percent more expensive than owning a house.
“Despite a recent increase in first-time buyer activity, demand remains strong and is keeping rental levels at historic highs. This, along with historically low borrowing costs, makes it as good a time to buy as it ever has been. However many buyers are still unable to take advantage of these conditions because of their inability to secure a mortgage,” said Nicholas Leeming of Zoopla.
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