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Cost of renting now cheaper for first-time buyers than homeownership – Zoopla

  • 22/08/2023
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Cost of renting now cheaper for first-time buyers than homeownership – Zoopla
The average cost of renting has surpassed the average monthly mortgage payment for the first time since 2010, data from a property portal suggests.

Data from Zoopla found that for a first-time buyer, the average UK rent was £122 cheaper than buying an average-priced rental property. 

The firm said this was due to higher mortgage rates and based on a property worth £263,000 with a 15 per cent deposit, on a 30-year term and a six per cent mortgage rate. 

According to Moneyfacts, as of 18 August the average two-year fixed mortgage rate was 6.76 per cent. 

Zoopla put the average rent for such a property at £1,163 and calculated that the monthly mortgage payment would be £1,285. 

There are disparities across the UK, as for buyers in Scotland, North East, North West, Northern Ireland, Wales, Yorkshire and Humber, purchasing a home is still cheaper than renting. 

To make rental costs similar to mortgage repayments, buyers in southern England would need deposits of 31 per cent or £42,000. 


Crushed dreams of homeownership 

This data follows a report from Zoopla which found that 42 per cent of adults aged between 18 and 39 years old had given up on the idea of buying a home within the next 10 years. 

The proportion was similar among those on higher salaries too, with 38 per cent of respondents earning £60,000 a year saying they did not expect to purchase within the decade. 

Respondents cited the cost of living crisis, rising house prices and increasing mortgage rates as factors limiting their ability to get onto the housing ladder. 

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