Zoopla.co.uk reveals top locations to Rent vs. Buy in Britain
20th July 2010
- Buying a home beats renting in 74% of cases around Britain
- Huddersfield tops list of places where renting beats buying
- Dundee current asking prices make buying far better option
- Still cheaper to buy than rent in London despite high prices
Research out today from leading property search website Zoopla.co.uk reveals the top places across Britain where renting a home beats buying and vice versa in current climate. The newly released Zoopla.co.uk Rent v. Buy Index compares current asking prices to the average rents for two bedroom flats in the top 50 locations around the country.
According to the Zoopla.co.uk statistics, buying is the better option and remains cheaper than renting in around three quarters (74%) of the locations studied with average monthly mortgage repayments being 8% lower on average than the cost of renting (assuming interest-only mortgage at 5% interest p.a.).
Topping the list of places where renting is a better option than buying currently is Huddersfield, where the average two-bed flat costs only £493 per month to rent versus £146,898 to buy. Renting is also cheaper than buying in a number of other places including Oldham, Brighton, Swansea and Edinburgh which complete the top five rental hotspots, according to Zoopla.co.uk
At the other end of the scale, Dundee comes in top of the list of places where buying is currently the best option with average asking prices for two-bed flats at only £88,263 versus £530 per month in rent. Other locations around Britain where buying is by far the better choice at current asking prices include Birmingham, Derby, Cambridge and Milton Keynes. Even in London, which has the highest rents in the country, buying is still the more cost-effective option, with average rents on two-bed flats currently at £2,155 per month versus average asking prices at an eye-watering £446,345.
While buying wins out over renting today, the impact of a rise in interest rates cannot be ignored. If interest rates were to increase by 1% and rents to remain the same, renting would become more cost-effective in 80% of the locations studied.
Nicholas Leeming, Commercial Director of Zoopla.co.uk, said: "Conventional wisdom in that buying is better than renting in the property market holds true for most places around the country. However, there are places where renting is the better option which may be driven by an excess of buy-to-let flats or a shortage of properties for sale."
Top 10 locations where renting beats buying
| Rank | Location | Avg. Asking Price* | Avg. Monthly Rent* | Rent/Buy Ratio |
|---|---|---|---|---|
| 1 | Huddersfield | £146,898 | £493 | 1.24 |
| 2 | Oldham | £153,228 | £549 | 1.16 |
| 3 | Brighton | £274,231 | £1,035 | 1.10 |
| 4 | Swansea | £185,925 | £702 | 1.10 |
| 5 | Edinburgh | £179,583 | £693 | 1.08 |
| 6 | Bournemouth | £181,772 | £711 | 1.07 |
| 7 | Bristol | £189,691 | £743 | 1.06 |
| 8 | Cardiff | £153,741 | £614 | 1.04 |
| 9 | Plymouth | £157,546 | £630 | 1.04 |
| 10 | Stockport | £143,721 | £579 | 1.03 |
Source: Zoopla.co.uk (* 2 bedroom flats, July 2010)
Top 10 locations where buying beats renting
| Rank | Location | Avg. Asking Price* | Avg. Monthly Rent* | Rent/Buy Ratio |
|---|---|---|---|---|
| 1 | Dundee | £88,263 | £530 | 0.69 |
| 2 | Birmingham | £131,546 | £765 | 0.72 |
| 3 | Derby | £100,483 | £562 | 0.74 |
| 4 | Cambridge | £193,577 | £1,046 | 0.77 |
| 5 | Milton Keynes | £135,633 | £728 | 0.78 |
| 6 | Walsall | £94,437 | £493 | 0.80 |
| 7 | Nottingham | £123,160 | £633 | 0.81 |
| 8 | York | £174,225 | £891 | 0.81 |
| 9 | Peterborough | £116,481 | £589 | 0.82 |
| 10 | Norwich | £130,729 | £655 | 0.83 |
Source: Zoopla.co.uk (* 2 bedroom flats, July 2010)
- Ends -
For further information, please contact PR Team on pr@zoopla.co.uk or +44 (0)20 3873 8770.
Notes to editors
Zoopla.co.uk Rent v. Buy Index - Key and Methodology
The Rent/Buy Ratio indicates the degree to which renting is less/more expensive than buying in each location. A figure above 1.0 indicates it is cheaper to rent than buy and the greater the figure the more expensive buying is versus renting. Similarly a figure below 1.0 indicates it is cheaper to buy than rent and the lower the figure the more expensive it is to rent versus buy.
Current active property listings on Zoopla.co.uk have been used to compare the relative costs of buying versus renting two bedroom flats in the largest 50 cities/towns across Britain. The cost of buying is based on repayment costs of an interest-only mortgage at 5% interest per annum.
About Zoopla.co.uk
Zoopla.co.uk is the UK's most comprehensive property website, focused on empowering consumers with the resources they need to make better-informed property decisions. We help our users make sense of the residential property market by combining property listings with market value data, local information and community tools.
Zoopla.co.uk was founded on the principles of transparency and efficiency and everything we do aims to make the market more effective for both property consumers and professionals alike. By combining free, instant value estimates for every UK home with sold prices, local market information and hundreds of thousands of properties available for sale and to rent, Zoopla.co.uk has rapidly become the ultimate destination for property consumers to search for property and do their market research. Our unique features allow users to gain an insight into the market and discover information they won't find anywhere else. And, as a result, we have become one of the most valued sources of both applicant and vendor leads for UK estate agents.
Launched in 2008, we are the fastest growing property website in the UK, now attracting over 12 million visits per month and are proud to have been awarded numerous accolades including being listed in the Top 10 UK Tech Companies (Guardian) and the Top 10 Most Innovative UK Companies (Smarta 100) as well as being voted the UK's Best Property Portal (Web User, Daily Mail Awards, Website of the Year).
Zoopla Limited is a privately held company with a highly experienced and proven management team, led by Founder and CEO, Alex Chesterman, and backed by well-respected angel investors and leading venture capital firms Atlas Venture (atlasventure.com) and Octopus Ventures (octopusventures.com).