While homeowners pay an average of £316 more on average per month compared to those renting, within five years the increase in equity will have outstripped the additional costs.
The average monthly rent across the UK currently stands at £865 per month as opposed to an average monthly mortgage repayment of £1,181.
After five years that additional cost has been balanced out and after seven years the average homeowner is £13,850 better off.
Aberdeen, Dundee and Glasgow are currently the most cost-effective towns for buying versus renting, as the average monthly mortgage repayment is less than the average rent.
Bournemouth, London and Huddersfield are the most cost-effective places to rent due to high property prices in relation to the cost of renting.
Lawrence Hall of Zoopla said:”People who invest in property are playing the long game. While buyers have to swallow the initial upfront costs of purchasing a property, they ultimately reap the benefits over renters down the line from building up equity in an asset that they will own by the end of the mortgage term. With the strong house price growth we’ve experienced this year and interest rates still low, saving for even a 10% deposit takes its time.”
Earlier this year a Zoopla report showed homeowners are starting to feel the effects of tougher lending rules put in place to protect borrowers from taking on large debts which may become unaffordable in the future.
