The cost of owning a home is cheaper than renting in 84% of the 50 largest towns and cities in Britain, according to Zoopla.

The web portal says that an ongoing shortage of accessible mortgages and the fall in ‘real wages’ has created difficulties for many first-time buyers, resulting in a rise in demand for rental properties while pushing up average rents. It now costs 14% more per month on average to rent a home compared to servicing a mortgage on an equivalent property.

The average rent for all property types now stands at £1785 per calendar month - up 2.7% since February. Milton Keynes, Dundee and Stoke-on-Trent top the list of places where owning beats renting by a large margin. At the other end of the spectrum, in Aberdeen, Bournemouth and Swansea renting is by far the better option from a cost perspective.

In London, renting is 21% more costly on average than servicing a mortgage with the average asking price for a 2-bedroom flat in the capital currently at £474,979 and the average rent on an equivalent property is £2,500 per month. With an interest-only mortgage at 5% p.a., owners are £6,250 per year better off than renters in the capital.

Nicholas Leeming of Zoopla said: “The climbing cost of renting is exacerbating the problems the property market currently faces. Higher rental costs leave less disposable income for renters to save for deposits. The problem will only ease if rental prices fall or mortgage availability improves dramatically, leaving the ball is firmly in the court of Britain’s lenders.”

TOP LOCATIONS WHERE BUYING BEATS RENTING

Rank


Location


Avg. Monthly Rent*


Avg. Asking Price*


Rental Premium**

1


Milton Keynes


£763


£132,967


38%

2


Dundee


£516


£90,880


36%

3


Stoke-on-Trent


£524


£92,746


36%

4


York


£858


£152,188


35%

5


Preston


£550


£98,980


33%

6


Bolton


£537


£98,433


31%

7


Nottingham


£628


£115,835


30%

8


Bradford


£503


£93,321


29%

9


Derby


£568


£105,415


29%

10


Wolverhampton


£503


£94,426


28%