Zoopla: First-time buyers are better off buying than renting

It is now 8% cheaper for first-time buyers to buy a property than to rent in the same area even despite higher mortgage rates, Zoopla research has revealed.

Analysis by the portal found that a third of homes of the 500,000 homes currently for sale can be bought with a mortgage and monthly repayments that cost less than the average local rent in the same area.

Zoopla’s analysis found that at a national level, the average monthly UK rent is currently £93 per month or 8% more expensive than the average mortgage repayment for a first-time buyer. 

This is based on getting a mortgage with a 20% deposit on a 30-year term at an average mortgage rate of 4.6%.

The difference is an improvement compared with last summer when mortgage rates were 1% higher and it was cheaper to rent than buy. 

There were some regional variations, with 40% of homes in the north of England and in Scotland are cheaper to buy, dropping to 27% in the South-West.

Izabella Lubowiecka, senior property researcher at Zoopla, said:

“First-time buyers are an important source of demand for homes accounting for 36% of home buyers looking to move home in the next two years.

“While higher mortgage rates have reduced buying power, our data shows there are many areas of the country where home ownership is more accessible assuming the buyer has saved a 20% deposit.” 

Kindly shared by Estate Agent Today