Renting Is Now Cheaper Than Buying A Home In Most Of The UK
The pandemic has had a huge impact on the UK property market.
According to research by Hamptons, for the first time in over six year, it is now cheaper to rent a property in the UK than it is to buy a property. The estate agency has revealed that pre-pandemic, buyers with a 10% deposit would have been better off than renters by £102 each month. However, this trend was reversed by the pandemic. Although rent prices in Britain have risen by 7.1% over the past 12 months, strong house price growth alongside increases in higher loan-to-value mortgage rates have increased the cost of buying a property. As such, it will now be cheaper for the typical first-time buyer to rent than to buy on a month per month basis.
In May 2021, it was 7% cheaper for the typical first-time buyer (with a 10% deposit) to rent a home than it was to purchase. In the UK, there now remains just four areas where buying a property is more affordable than renting: Scotland, the North East, the North West, Yorkshire, and Humber. The shift is a huge contrast to May 2020, when rental demand dropped as younger adults returned to their family homes during the start of the pandemic. The restrictions resulted in reduced funds for many young adults, and the lockdown made city living less appealing. In early 2020, buying was cheaper than renting in every region of the UK.
