Rental Costs Exceed Mortgage Payments Around the UK
The latest figures reveal that renting a home is more costly than purchasing one in 80 per cent of UK towns. The website Zoopla has also revealed that, on average, rents are showing up 10 per cent more expensive.
Some towns are even holding properties which are exceeding mortgage payments by 40 per cent. While a lack of affordable mortgages exists, the demand for rental properties continues to increase. This is creating even more of a one sided, demand is greater than supply problem, within the market. The director of Zoopla, Nicholas Leeming, commented on the status of the current rental market, saying: "Buying has always been somewhat cheaper than renting, but we’re now seeing a real insider-outsider divide in the housing market. "For those who are able to buy a home, costs are low, but for those who can’t, costs are much higher – and the doorway to entry into the housing market is narrower than ever. The freezing up of credit has put home-ownership beyond the reach of many renters, and it’s driving a larger and larger wedge between them and owner-occupiers." Some areas are in worse shape than others. Rent is exceeding mortgage payments by almost 40 per cent in York. An additional 13 of the 50 largest towns in the UK have rents exceeding mortgage payments by 20 per cent. At the same time rental payments are surpassing mortgage payments, the landscape of the housing market could be even worse. If interest rates were to rise by just 1 per cent, renting would quickly become more cost effective than mortgage payments in about three fourths of all areas studied.