There are only four regions in the UK where it is cheaper to buy a home than to rent a property.
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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.
But falling rents mean people are now spending far less to live in cities.
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.
- 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
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.”