Renting is cheaper than buying across all but two of the UK’s
376 boroughs despite strong rental growth and historically low bank base rates. This is especially true in the new era where interest only mortgages are rare and come at a high price, particularly for
first time buyers.

The new findings show that on a capital repayment basis and taking into account the initial costs of buying, the common perception that it is cheaper to buy than rent held by the majority of existing and aspiring home owners is actually misplaced.

It now costs on average 21 per cent or £2,068 more in the first year of ownership to buy than to rent the average two bedroom property for those with a 75% loan to value, rising to almost £7,400 in inner London after capital repayments have been taken into account.

While most households understand the long-term financial benefits of home ownership, such as wealth generation and lower lifetime housing costs, these benefits have become less attainable; as the costs associated with the early years of home ownership trap more people in the private rented sector.

Taken from
Special Report: Renting vs Buying