The surge in rental costs means it is now cheaper to buy a home than to rent one, reversing a recent trend, according to Zoopla.
The property website said the average UK rent is £1,248 per month, while average mortgage repayments are £1,038 for first-time buyers on a 20% deposit, which equates to £50,740, for a typical first-time buyer priced property (£253,700).
First-time buyer deposits tend to be larger in London (30%), where affordability considerations mean putting down a large deposit is needed to improve access to buying a home.
It is cheaper to buy than rent across all areas of the UK, with the exception of the East of England, where it is 9% more expensive. The cost of buying versus renting are very close across the South East and the East Midlands regions, with the widest gap in the North East where mortgage repayments are 24% below rents.
Zoopla has analysed the cost of renting and buying across 118 postal areas of Great Britain, which reveals some wide regional variations. Buying costs are more than 30% below rental costs in Glasgow (-46%, G) and Edinburgh (-32%, EH) and areas in northern England including Newcastle (-34%, NE) and Liverpool (-31%, L) as well as Cardiff (-31%, CF) in Wales.
Buying costs more than renting in 10 per cent of postal areas led by the Harrogate (HG) postal area where buying costs 15 per cent more than renting followed by the Watford (WD) postal area +7 per cent. In areas with higher house prices the cost of getting a first home is higher which prices out more first-time buyers and puts extra pressure on the rental market, pushing rents higher.
Average cost of mortgage repayments vs rents by region
|
Area |
First-time buyer property price |
20% deposit |
Mortgage repayments £pcm at 4.5% and 30 year term |
Average rent £pcm |
Mortgage costs versus rent costs |
Difference between repayments and rent |
|
North East |
£138,500 |
£27,700 |
£567 |
£748 |
-24% |
(£181) |
|
Yorks and Humber |
£161,900 |
£32,380 |
£663 |
£839 |
-21% |
(£176) |
|
North West |
£176,900 |
£35,380 |
£724 |
£915 |
-21% |
(£191) |
|
Wales |
£179,900 |
£35,980 |
£736 |
£929 |
-21% |
(£193) |
|
Scotland |
£165,700 |
£33,140 |
£678 |
£835 |
-19% |
(£157) |
|
West Midlands |
£207,700 |
£41,540 |
£850 |
£960 |
-11% |
(£110) |
|
South West |
£250,700 |
£50,140 |
£1,026 |
£1,124 |
-9% |
(£98) |
|
London |
£417,200 |
£83,440 |
£1,708 |
£1,822 |
-6% |
(£114) |
|
East Midlands |
£217,800 |
£43,560 |
£891 |
£903 |
-1% |
(£12) |
|
South East |
£332,800 |
£66,560 |
£1,362 |
£1,380 |
-1% |
(£18) |
|
East of England |
£317,100 |
£63,420 |
£1,298 |
£1,228 |
6% |
£70 |
|
GB |
£253,700 |
£50,740 |
£1,038 |
£1,284 |
-19% |
(£246) |
Source: Zoopla – NOTE – the average rent in London is outer London
Whilst buying is cheaper than renting across the majority of Great Britain, affordability challenges still remain. Raising a deposit is a significant constraint for first-time buyers. An average 20% deposit on a typical first-time buyer home ranges from £27,700 in the North East, to £83,400 in London. Many first-time buyers rely on family support for help with deposits, with 63% admitting that they received help from family members when buying their first home1.
Mortgage regulations introduced in 2015 mean that first-time buyers also have to demonstrate to their lender that they can afford a higher mortgage rate to ensure that they have the ability to afford their mortgage if borrowing costs were to increase.
Many lenders are currently ‘stress testing’ affordability at an eight per cent mortgage rate. This tilts the renting versus buying balance, pushing monthly mortgage repayments above the cost of renting across all regions and countries of the UK. This varies from 10 per cent higher in the North East to over 50% higher in the East of England.
These regulations stopped boom and bust in house prices as mortgage rates fell and then increased over 2022-23, but they have created an extra hurdle for first-time buyers, stoking demand for rented homes, and pushing rents higher.
Richard Donnell, executive director at Zoopla, said: “Our renting versus buying analysis is welcome news for would-be first-time buyers looking to buy their first home, having faced steep increases in rents over the last three years.
“There remain challenges facing first-time buyers, especially those on average incomes or with small deposits. Mortgage regulations introduced in 2015 to stop a housing market boom and bust have created a higher hurdle to home ownership for those on middle incomes, who can afford to make rental payments but are unable to prove they can afford higher mortgage ‘stress’ rates should borrowing costs increase in the future. The more first-time buyers priced out of home ownership, the greater the pressure on the private rental market and rental levels.
“Proposals to review regulations around mortgages are welcome. We do not want to return to the loose lending that preceded the global financial crisis. A modest loosening in lending rules with mortgage stress testing rates closer to 6-7 per cent would help more middle to higher income renters access home ownership and ease some of the pressure in the rental market without causing a boom in house prices.”
This analysis treats mortgage repayments and rent as if they are two versions of the same thing—monthly outgoings to secure a place to live. But that’s fundamentally flawed.
A mortgage isn’t just a cost; it’s an investment that builds equity in an appreciating asset. Rent, on the other hand, is a pure expense—once paid, it’s gone, with no financial return to the tenant.
If you’re going to compare the two properly, where is the asset appreciation column?
For a meaningful comparison, it’s essential to show:
Total cost over time – Renting is forever, while a mortgage eventually ends.
Capital repaid – The portion of mortgage payments that contributes to ownership.
Property appreciation – UK house prices have historically risen by around 6% per year. Over a typical mortgage term, a £250,000 home could be worth £1 million, while a tenant will have spent more than that in rent and still own nothing.
Industry professionals should challenge these misleading narratives because they distort public perception and influence policy decisions. If we allow renting and buying to be treated as parallel options, without recognising that one builds long-term wealth while the other locks people into an endless payment cycle, we fail ourselves, our clients and the market.
Buying a home isn’t just about affordability today—it’s about financial security in the future. Ignoring property appreciation in these comparisons isn’t just an oversight; it renders the whole analysis meaningless.
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I can’t paste a table in the comments so here’s the omitted detail.
Region: North East
Current Property Price: £138,500
Annual Asset Growth (6%): £8,310
Projected Value in 25 Years: £594,000
Tenant’s Asset Value: £0
Region: Yorks & Humber
Current Property Price: £161,900
Annual Asset Growth (6%): £9,714
Projected Value in 25 Years: £694,000
Tenant’s Asset Value: £0
Region: North West
Current Property Price: £176,900
Annual Asset Growth (6%): £10,614
Projected Value in 25 Years: £759,000
Tenant’s Asset Value: £0
Region: Wales
Current Property Price: £179,900
Annual Asset Growth (6%): £10,794
Projected Value in 25 Years: £772,000
Tenant’s Asset Value: £0
Region: Scotland
Current Property Price: £165,700
Annual Asset Growth (6%): £9,942
Projected Value in 25 Years: £711,000
Tenant’s Asset Value: £0
Region: West Midlands
Current Property Price: £207,700
Annual Asset Growth (6%): £12,462
Projected Value in 25 Years: £891,000
Tenant’s Asset Value: £0
Region: South West
Current Property Price: £250,700
Annual Asset Growth (6%): £15,042
Projected Value in 25 Years: £1,075,000
Tenant’s Asset Value: £0
Region: London
Current Property Price: £417,200
Annual Asset Growth (6%): £25,032
Projected Value in 25 Years: £1,787,000
Tenant’s Asset Value: £0
Region: East Midlands
Current Property Price: £217,800
Annual Asset Growth (6%): £13,068
Projected Value in 25 Years: £935,000
Tenant’s Asset Value: £0
Region: South East
Current Property Price: £332,800
Annual Asset Growth (6%): £19,968
Projected Value in 25 Years: £1,428,000
Tenant’s Asset Value: £0
Region: East of England
Current Property Price: £317,100
Annual Asset Growth (6%): £19,026
Projected Value in 25 Years: £1,360,000
Tenant’s Asset Value: £0
Region: Great Britain (Average)
Current Property Price: £253,700
Annual Asset Growth (6%): £15,222
Projected Value in 25 Years: £1,089,000
Tenant’s Asset Value: £0
(Note: I could apply the transaction price index trend for each region, but this generalisation is enough to make the point. It’s not hard or onerous to provide the full picture to the public)
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Apologies for the third post, but this PR doesn’t sit right with me. Given the audience, scrutiny was inevitable.
Total rent paid over 25 years, starting at £1,250 and rising 5% a year, is £715,900. Total mortgage payments over 25 years, based on a 4% interest rate and a 10% deposit, come to £361,000. Of that mortgage cost, the actual interest paid—the true cost of renting the money—is £133,233.
What does that mean? Mortgage interest is the cost of renting the money, while the rest of the mortgage payments go into owning the asset. A homeowner ends up with a property worth over £1 million, while a tenant spends over five times the cost of mortgage interest and owns nothing.
Even with interest factored in, renting money (a mortgage) is far cheaper than renting a home forever. Leaving that out of the comparison does a disservice to the discussion. Of seemingly comparable monthly outlays, the capital repayment—a form of enforced saving—is paying off the loan.
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The average UK rental figure includes studios to 22 bed mansions.
What is the average sized property FTBs buy?
I think the article firstly needs to confirm the average rent FTBs are paying, rather than the whole market, before it can be claimed FTB mortgages are cheaper.
Looks like a lot of holes in this one buut good clickbait.
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wow, just wow!
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