Wednesday, 2 March 2011 1:53 PM
New research suggests that renting a property in the UK now costs an average of 10.5 per cent more than having a mortgage.
According to property website Zoopla, paying rent is now a more expensive option in 80 per cent of towns and cities throughout Britain.
In some areas the cost difference is staggering, with average rents exceeding typical mortgage payments by 42 per cent in Milton Keynes for example.
Buying a home is similarly more cost effective in Birmingham, where the average asking price is £129,350 and rent is typically charged at around £725 a month – a 35 per cent difference in affordability, with owning being the cheaper option.
However, there are some areas that currently buck the trend, such as Plymouth and Huddersfield, where paying rent costs 10.9 and 10.7 per cent less respectively.
Nicholas Leeming, business development director at Zoopla, commented: "While lenders maintain their vice-like grip on the mortgage market, more and more would-be buyers are forced to rent instead of getting onto the housing ladder.
"Rents will likely rise further as a result and renters will continue to pay a significant premium for being stuck in the sector."
He added, however, that: "While buying wins out over renting today, the impact of a possible rise in interest rates cannot be ignored.
"If interest rates were to increase by one per cent and rents were to remain the same, renting would become more cost-effective in 78 per cent of the locations studied."
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