Buying cheaper than renting

Falling house prices and increasing rental demand have been attributed as the causes.

Zoopla analysed the asking prices and rents for all two-bedroom flats currently on the market, comparing rental cost to the cost of ownership based on servicing an interest-only mortgage at 5% per annum.

Renters were on average £2,544 per year worse off than owners in Milton Keynes where the ratio of the cost between buying and renting was highest.

Aberdeen, on the other end of the scale, remained more cost-effective to rent than to own where it cost 9% more to own, leaving owners on average £936 worse off.

Nicholas Leeming, business development director at Zoopla, said: “With house prices down, low interest rates and sky high demand in the private rental sector, buying has never been a better option for those able to secure a mortgage.

“With owners reducing prices further in order to achieve a sale before Christmas, there may well not have been a better time to buy in recent times.”