Zoopla has revealed that first-time buyer (FTB) mortgage payments, averaging £1,038 per month, are 20% lower than the average rent of £1,248 per month across Great Britain.
The analysis found that it is currently cheaper to buy than rent in most UK areas, except the East of England, where buying is 9% more expensive.
The North East showed the widest gap, with mortgage repayments 24% below rents.
Zoopla’s analysis across 118 postal areas also found that buying costs are significantly lower than renting, especially in Glasgow, Edinburgh, and Newcastle.
However, in places like Harrogate and Watford, buying costs more than renting.
Richard Donnell, executive director at Zoopla, said: “Our renting versus buying analysis is welcome news for would-be first-time buyers looking to buy their first home, having faced steep increases in rents over the last three years.
“There remain challenges facing first-time buyers, especially those on average incomes or with small deposits.
“Mortgage regulations introduced in 2015 to stop a housing market boom and bust have created a higher hurdle to home ownership for those on middle incomes, who can afford to make rental payments but are unable to prove they can afford higher mortgage ‘stress’ rates should borrowing costs increase in the future.”
Donnell added: “The more first-time buyers priced out of home ownership, the greater the pressure on the private rental market and rental levels.
“Proposals to review regulations around mortgages are welcome.
“We do not want to return to the loose lending that preceded the global financial crisis.”
He said: “A modest loosening in lending rules with mortgage stress testing rates closer to 6-7 per cent would help more middle to higher income renters access home ownership and ease some of the pressure in the rental market without causing a boom in house prices.”
