No longer cheaper to rent than to buy
03/03/2011 - Low interest rates and low property prices
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New figures show that in 8 out of 10 towns, it is now cheaper to buy a home than it is to rent one.
Due to falling house prices, renting a home now costs an average 10.5 more than paying interest on a mortgage for a comparable property. In the middle of last year, the figure was 8.7%.
Low interest rates and with falling property prices mean that people are far better off purchasing a two bedroom flat than they are renting one. This follows with almost 80% of towns and cities in Great Britain. The town that showed the most difference was Milton Keynes. The cost to rent a home in the town worked out to be 42% higher than to buy a property.
Reading and Derby were also towns in the top five where it was cheaper to buy than rent with tenants paying a premium of 34% in Reading and 27% in Derby. It was found that in 14 of the largest towns and cities in Great Britain, rents exceeded the cost of a mortgage by more than 20%.
It was found that Plymouth had the best value rental market with tenants paying an average £581 a month compared to an interest only mortgage payment on a similar property of just over £650.
