Buying still beats renting across 84% of Britain

Renting is now 16% more expensive on average than owning across Britain

Despite a recent increase in first-time buyer activity, demand remains strong and is keeping rental levels at historic highs. This, along with historically low borrowing costs, makes it as good a time to buy property as it ever has been. However many buyers are still unable to take advantage of these conditions because of their struggle to secure a mortgage.

Our latest Rent v Buy research shows that the cost of servicing a mortgage is now cheaper than renting in 42 of the top 50 (84%) towns and cities in Britain. This figure represents a slight drop from three months earlier when was cheaper to buy than rent in 47 of the top 50 towns.

Despite the fall over the last quarter, buying remains cheaper than renting a property today across the vast majority of the country and it is cheaper to buy now than rent in more locations than at the same time last year. The shortage of mortgages and difficulties faced by first-time buyers in securing a deposit has increased demand for rental property and led to renting in Britain now costing 16% more on average than buying, up from 11% this time last year.

The average monthly rent in Britain has come down slightly by £9 on average over the past 3 months to £1,470 per month in February 2012. Meanwhile asking prices have dropped by £6,500 on average over the same period to £255,037.

Swansea, Oldham and Cambridge top the list of places where it currently still pays to rent rather than buy with rental discounts ranging from 4.6% to 8.4%. In contrast, it make most sense to buy in Milton Keynes where renting is 38.8% more expensive than servicing a mortgage, leaving renters £2,580 per year worse off on average. York and Preston also offer buyers better deals to buy than rent with renters paying around a third more on average in both places.

In London, despite the high cost of buying, it still beats renting with the average asking price for a 2-bedroom flat in the capital currently at £452,387, while the average rent for an equivalent property is £2,422 per month, making renting 29.6% more expensive than owning on average.

Locations where renting rules over buying

Rank Location Avg. Monthly Rent* Avg. Asking Price* Rental Discount**
1 Swansea £676 £177,100 -8.4%
2 Oldham £497 £126,447 -5.6%
3 Cambridge £1,033 £260,029 -4.6%
4 Bournemouth £757 £189,280 -4.0%
5 Liverpool £598 £145,581 -1.4%
6 Aberdeen £846 £205,618 -1.2%
7 Huddersfield £495 £120,049 -0.9%
8 Plymouth £601 £144,862 -0.4%

Source: Zoopla.co.uk

* Based on 2 bedroom flats on the market for sale/rent in February 2012

** % variance between average monthly rent and average monthly cost of 5% p.a. interest-only mortgage

Top 10 locations where buying beats renting

Rank Location Avg. Monthly Rent* Avg. Asking Price* Rental Discount**
1 Milton Keynes £770 £133,141 38.8%
2 York £856 £154,176 33.2%
3 Preston £550 £99,838 32.3%
4 Northampton £589 £107,314 31.7%
5 Birmingham £701 £128,170 31.3%
6 Walsall £497 £91,098 30.9%
7 London £2,442 £452,387 29.6%
8 Bradford £482 £89,923 28.5%
9 Swindon £587 £109,912 28.2%
10 Warrington £571 £106,987 28.0%

Source: Zoopla.co.uk

* Based on 2 bedroom flats on the market for sale/rent in February 2012

** % variance between average monthly rent and average monthly cost of 5% p.a. interest-only mortgage

Methodology

  • To compare the cost of buying versus renting, Zoopla analysed the current asking prices and rents of over 84,000 two-bedroom flats currently on the market, comparing the rental cost to the cost of ownership based on servicing an interest-only mortgage at 5% p.a.
  • Mortgage payments are calculated assuming a mortgage rate of 5% p.a. to provide an effective comparison to renting.
  • We use an interest-only mortgage rate in the comparison as the interest on a mortgage is the effective cost of financing living in that home.
  • We assume a 100% LTV ratio to do a fair and simple comparison of the cost of financing versus the cost of rent.

As always, please feel free to share and use this research, all we ask is that you credit the source as Zoopla.co.uk and link to Zoopla.co.uk. Thank you.

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March 19, 2012 at 9:46 AM 3 comments

How to find a property to rent for the London 2012 Olympics period

Over the last four weeks we have seen an increase of 161% in searches for the term ‘Olympics’, a trend that is almost certain to grow over the coming months.

International demand for short-term rental property in London over the summer is set to be fierce. Hotel room availability in the city during the Olympics is becoming non-existent with hotel rooms having been booked out months, and in some cases years, in advance making short-term property rentals a great alternative.

Consequently, with just under 5 months to go until the London Olympics, we have made it easy for the millions of international visitors heading to the capital for the Games to find accommodation. From the Zoopla home page we have linked directly to search results highlighting houses and flats available to rent in London as short-term lets during the summer.

With almost 1,000 properties in London currently listed to rent during the Olympic period, there is a vast range of options to select, from a one-bedroom flat for £200 per week within walking distance of the Olympic Stadium to a six-bedroom house in trendy Notting Hill for an Olympic £30,000 per week

So if you are visiting this Summer and looking for accommodation, here are som tips to help you.

Top tips for international visitors looking to secure an Olympic rental:

1. Use a reputable lettings agent, such as one listed on Zoopla.co.uk

2. Be prepared to make a quick decision to avoid any disappointment

3. Have all relevant references & identification paperwork needed ready

4. Check the location & nearest transport links using Zoopla map view

5. Make sure any deposit paid is protected by a tenant deposit scheme

Properties available as short-term lets during the Olympics can be found here

As always, please feel free to share and use this research, all we ask is that you credit the source as Zoopla.co.uk and link to Zoopla.co.uk. Thank you.

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March 8, 2012 at 12:59 PM Leave a comment

Zoopla reveals where the ‘Knowsiest Neighbours’ live

As a nation we’re obsessed with property and property values. We want to know what prices people paid, current asking prices and we’re constantly keeping an eye out for our dream home. However, we’re spotting an increasing trend of homeowners not only tracking the market value of their own home but also keeping an eye on the value of their neighbours’ properties.

We firmly believe here at Zoopla that there is a clear advantage to staying ‘in the know’ when it comes to property. Knowing when to buy or sell and how much to pay or ask for is the key to a successful property transaction and can avoid the pitfalls of overpaying or being stuck for longer than expected.

Our latest research shows that homeowners’ obsession with house prices and monitoring the value of their homes shows no sign of waning. We give homeowners and buyers the tools to super charge their knowsey tendancies by providing free property value estimates on every UK home along with over 17 million sold prices. With information as a valuable commodity, those ‘in the know’ about local house prices and trends are likely to have a significant advantage when transacting in the property market.

The latest data reveals that homeowners in Harpenden, Pinner and Reigate are the ‘knowsiest neighbours’ in Britain (in other words, those most in the know about local property values) whilst residents in Aberystwyth, Birkenhead and Saltburn-by-the-Sea are the least ‘knowsey neighbours’ (least bothered about keeping track of local property prices).

We’ve also unearthed the ‘knowsiest street in Britain’, Newton Road Birmingham, B43, where residents regularly checked the value of their own homes and neighbouring properties on Zoopla.co.uk more frequently over the past 12 months than anywhere else in the country. The data from Zoopla also shows that ‘knowsiness’ increases with property values with most of the ‘knowsiest’ streets and areas having property values well above the national average.

Areas with ‘Knowsiest neighbours’ in Britain

Rank Location Average Property Value
1 Harpenden, Hertfordshire £577,848
2 Pinner, London £443,458
3 Reigate, Surrey £407,038
4 Maidenhead, Berkshire £380,142
5 Farnham, Surrey £423,457
6 Caterham, Surrey £342,423
7 Stanmore, London £441,084
8 Teddington, London £499,001
9 Ascot, Berkshire £598,767
10 Weybridge, Surrey £598,767

Source: Zoopla.co.uk (February 2012)

Areas with least ‘Knowsey neighbours’ in Britain

Rank Location Average Property Value
1 Aberystwyth, Ceredigion £184,342
2 Birkenhead, Merseyside £94,804
3 Saltburn-by-the-Sea, North Yorkshire £128,561
4 Barrow-in-Furness, Cumbria £110,291
5 Wednesbury, West Midlands £106,470
6 Peterlee, Durham £90,171
7 Felixstowe, Suffolk £183,272
8 Cleethorpes, Lincolnshire £115,258
9 South Shields, Tyne & Wear £116,972
10 Salford, Greater Manchester £120,491

Source: Zoopla.co.uk (February 2012)

‘Knowsiest neighbours’ in Britain

Rank Street Average Property Value
1 Newton Road, Birmingham, B43 £191,080
2 Uxbridge Road, London, W5 £413,219
3 Burrells Wharf Square, London E14 £310,682
4 The Avenue, London, E4 £292,044
5 Battersea Park Road, London, SW8 £335,213
6 Torbay Road, Harrow, HA2 £305,443
7 Kingston Road, London, SW19 £331,385
8 Scarisbrick New Road, Southport, PR8 £163,909
9 Loughborough Road, Nottingham, NG2 £194,330
10 Chase Side, Enfield, EN2 £280,486

Source: Zoopla.co.uk (February 2012)

As always, please feel free to share and use this research, all we ask is that you credit the source as Zoopla.co.uk and link to Zoopla.co.uk. Thank you.

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March 6, 2012 at 11:51 AM 2 comments

Football fan stakes £1.4m home on home club’s success

This is a legacy post from the findaproperty.com blog which is now maintained as an archive within the Zoopla blog. Links have been preserved.

Even the most self-assured Premier League player would think twice before staking their home on a winning season, but that’s exactlywhat one UK football fan has done.

Martin Senior has vowed to give a full refund to whoever buys his £1.4m house in Hove, East Sussex if his favourite football club makes it to the Premier League.

The four-bedroom home has an asking price of £1.4m but comes with a rather unusual clause - Senior will pay back every penny to the buyer if Brighton and Albion FC get promoted.

Martin Senior’s Hove home is on the market for £1.4m, but he says he’ll refund every penny if his team makes it into the Premier League. Credit: Andrew Hasson / Rex Features

The odds on the Championship team making it to the Premier League are currently 10-1. The team is in ninth position with 49 points and is two points off a play-off place with 15 games to play.

Senior, a sculpter, designed and built the home himself. It includes a large open-plan living room and kitchen with doors opening out onto a tropical garden. As well as a guest suite and two further bedrooms, the master bedroom suite comes complete with a roof terrace and sea views.

See more pictures of the home.

Anyone – not just football fanatics – can buy the house, but Senior has urged a fellow Seagulls fan to step forward.

“It would be the perfect end to the season for an Albion fan – a free house and their team in the Premier League,” Senior says.

February 24, 2012 at 1:58 PM 1 comment

Winter 2012 Property Market: Recovery?

It was good news for most homeowners across the UK today as new FindaProperty.com figures showed both sales and rental asking prices rose for the first time since September, with London and the South East leading the way.

After a quiet winter, the property market has warmed up in the first month of 2012 as those selling their homes set their sights on higher prices. Overall, the average asking price of a home in the UK is up 0.3% compared to the same time last month to £218,114 – or 1.1% up on prices a year ago.

While some areas are still experiencing falling asking prices, regions such as London and the South East are continuing to drive the market upwards. In London, homeowners are now asking an average £460,386 for a home in London, which is 1.6% more than they wanted last month and 7.3% more than a year ago. The average price of a home in the South East is also up to £271,367 or 0.5% compared to the same time last month, while rental asking prices here increased by 0.8% in January.

Part of these increases are down to seasonal growth – where property prices steadily rise between January and June, but some of the boost to prices may also be a result of first-time buyers attempting to complete on sales before their stamp duty holiday on homes between £125,000 and £250,000 ends at the end of March.

Those who don’t owe their own homes had to find slightly more for rent last month after rental asking prices rose by 0.3% to an average of £864 in January. This increase was most sharply felt on homes to rent London and the North East, rising by 1.3% and 1.0% to £2,113 and £597 respectively. However, rents in the West Midlands fell for the first time since August 2011, experiencing a decrease of 3.3% in January, down to £652. Rents in Yorkshire and the Humber also fell sharply, by 0.9%, to £553.

February 22, 2012 at 2:37 PM 1 comment

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