Renting now cheaper than buying a home, Hamptons sayson June 13, 2021 at 11:45 pm

- Advertisement -
- Advertisement -
- Advertisement -
- Advertisement -

There are only four regions in the UK where it is cheaper to buy a home than to rent a property.

To let signs seen in Maida Vale, London during the pandemic

image copyrightGetty Images

It is cheaper to rent a property than it is to buy a home for the first time in six years, says Hamptons.

Prior to the pandemic in March 2020, people with a 10% deposit would have been £102 per month better off buying a property than renting, the estate agency said.

There are now only four areas in the UK where it is cheaper to buy a home than rent.

They are the North East, North West, Yorkshire and Humber, and Scotland.

Back in early 2020, it was cheaper to buy instead of renting in every nation or region in the UK. However, the average cost of renting has jumped.

In May, the average cost of a newly let rental home was 7.1% higher than a year earlier – the fastest rate of growth Hamptons has seen since it began recording data in 2013.

This is in contrast to last May, when demand dropped due to work and leisure restrictions, as well as younger adults returning to live with their families during the pandemic.

2px presentational grey line
  • Greater London – £251 cheaper
  • South East – £54 cheaper
  • South West – £108 cheaper
  • East – £117 cheaper
  • East Midlands – £98 cheaper
  • West Midlands, £35 cheaper
  • Yorkshire and the Humber – £5 more expensive
  • North West – £4 more expensive
  • North East – £72 more expensive
  • Wales – £11 cheaper
  • Scotland – £130 more expensive
2px presentational grey line

Aneisha Beveridge, Hamptons’ head of research, says the pandemic is responsible for reversing this six-year-long trend.

“A year ago, lenders were either increasing their rates or withdrawing higher loan-to-value mortgages altogether,” she said.

“For first-time buyers in particular this pushed up the cost of paying a mortgage, if they could get one at all, to well above the cost of renting.”

Ms Beveridge added that it was likely the balance will swing back somewhat towards buying, particularly as mortgage rates come down, but this would likely be partly offset by rising house prices.

“And while interest rates are falling, they’re still considerably above where they were pre-pandemic on higher LTV (loan-to-value) loans,” she said.

“Despite this, we expect the gap between renting and buying to close over the remainder of this year, moving back towards longer-term levels in 2022.”

- Advertisement -




Africa’s week in pictures: 12-18 August 2022on August 18, 2022 at 11:38 pm

A selection of the best photos from across Africa and beyond this week.A selection of the best photos from across Africa and beyond this...

Yorkshire appoint Gibson as head coach following Rafiq racism scandalon January 19, 2022 at 12:46 pm

Yorkshire appoint former West Indies all-rounder Ottis Gibson as their new head coach on a three-year deal.Yorkshire appoint former West Indies all-rounder Ottis Gibson...

Lord Young barred from debate after falling asleep in Parliamenton March 15, 2022 at 10:12 am

A Labour member of the House of Lords has been told off for falling asleep in the debating chamber.

Bank and Treasury seek to reassure markets as pound hiton September 26, 2022 at 4:47 pm

The Bank of England will not hold an emergency meeting to set interest rates after the pound fell.The Bank of England has said it...

Barcelona’s Putellas wins Best Fifa award & Hayes named best coachon January 17, 2022 at 7:28 pm

Barcelona midfielder Alexia Putellas is named the Best Fifa Women's Player of the Year.Barcelona midfielder Alexia Putellas is named the Best Fifa Women's Player...