Renting is now cheaper than buying

RENTING a home is now cheaper on average than buying one, reversing a trend seen for the past six years.

Last month the average private sector tenant in Britain spent £71 per month less in rent than if they were servicing the repayments on a 10% deposit mortgage, according to estate and lettings agents Hamptons.

This means they would have spent a monthly average of £1,054 on rent compared to £1,125 on mortgage repayments.

Strong house price growth has added to the cost of buying and owning a home.

Aneisha Beveridge, head of research at Hamptons said: “A year ago, lenders were either increasing their rates or withdrawing higher loan-to-value mortgages altogether. 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.

“It is likely the balance will swing back somewhat towards buying, particularly as mortgage rates come down. However this is likely to be partly offset by rising house prices.”