Renting now cheaper than buying in many areas according to recent research

The May edition of Rentguard Insurance's "Property Eye" has an article saying that according to research released by Countrywide Residential Lettings, rising house prices mean that the cost of renting relative to buying has fallen.

The report suggests that in 2014, the average tenant pays 93p in rent for every £1 spent repaying a mortgage which represents a year on year decrease of 3p.

It also shows that house prices have risen more quickly that rents over the last 12 months across 87% of England, Scotland and Wales.  The 13% of areas where the cost of renting rose relative to buying were mainly in the North East of England or South West Wales.

In London the average tenant spends 86p on rent, down from 93p a year ago, for every £1 spent by a homeowner.  And it is now cheaper to rent than buy in 30 out of the 33 London boroughs, up from 25 in 2013.

Nick Dunning, group commercial director at Countrywide said: “As house prices rise, renting increasingly allows people to live in areas they would otherwise be unable to afford to buy.  In more expensive cities, such as London, the cost of renting in more central areas can be just half the cost of buying.  The result is that in the most central areas of London, and many other global cities, over half the population now rent.”

“While homeowners can benefit from increases to the value of their home over the long-term, homeownership itself doesn’t automatically equate to large financial returns.  The money saved by renting can be invested in other ways.  The reality is that tenants, far from being priced out of the market in the long-term, have benefitted from the flexibility this growing and increasingly professional sector offers.”

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