Renting now cheaper than first-time mortgages, says Zoopla

The emergence successful owe rates means it is present cheaper to rent a location than to bargain 1 for the archetypal clip since 2010, according to Zoopla.

The spot website said the mean UK rent is £1,163 per month, portion mean owe repayments are £1,285 for first-time buyers connected a 15% deposit.

Zoopla said London and the South East are the worst affected locations for higher owe costs versus rent.

But it is inactive cheaper to bargain successful areas similar bluish England and Scotland.

The mean two-year fixed-rate owe is present 6.76%, according to Moneyfacts, the fiscal accusation service. For a five-year fixed deal, it is 6.24%.

Rates for some two- and five-year fixed mortgages were beneath 3% successful aboriginal 2021.

Richard Donnell, caput of insights astatine Zoopla, told the BBC that for the past decennary it had been "much cheaper to bargain than rent" owed to "ultra inexpensive owe rates".

But that inclination had been reversed, helium said, adjacent though rents person besides been rising quickly.

"Around the state the representation varies arsenic successful areas with little location prices buying is inactive cheaper than renting," Mr Donnell added. "In confederate England wherever prices are higher, entree to location ownership is astir retired of scope and rents are precocious arsenic well."

On average, monthly rent is £122 cheaper than a monthly owe repayment.

Zoopla based its calculation connected the mean worth of a UK location of £263,000 wherever a first-time purchaser had enactment down a 15% deposit of £39,500. It past calculated what the mean monthly owe outgo is compared to the mean rental cost.

The quality was astir pronounced successful London wherever the mean location terms is astir £522,000. Zoopla said the mean monthly rent is £493 little than the mean monthly owe payment.

In Scotland, however, wherever an mean location is £127,000, the mean owe outgo is £128 cheaper than the mean rent.

Mortgage rates person risen arsenic the Bank of England has lifted benchmark involvement rates to tackle precocious inflation, which measures the complaint astatine which prices rise.

There is uncertainty astir what the Bank volition bash successful the coming months, though fiscal markets deliberation rates mightiness beryllium adjacent to their peak.

Mr Donnell said helium expected owe rates to autumn backmost and continued maturation successful rents would pb to buying becoming cheaper than renting again arsenic 2023 progresses.

However, helium said lodging unaffordability successful confederate England would stay a "real occupation for first-time buyers and renters".