Buying vs Renting

For a buyer with a 25% deposit, the monthly mortgage payment in all areas remains lower than the equivalent monthly rent for a 2-bed flat (2-year fixed rate mortgage, over 25 years).

However, for those with a 10% deposit (90% LtV), increased mortgage rates in March mean that in London, the monthly rent would be 9% less than mortgage payments, and there is virtually no difference in the South West, South East and East.

For first-time buyers, getting together a deposit is still the most significant barrier to home ownership. Maintenance costs and giving up flexibility are other considerations.

As interest rates continue to rise, the monthly cost gap is likely to narrow further in all regions and this may see more 'would-be' first-time buyers evaluating their housing options.

Source: Dataloft, Land Registry, DRMA, Bank of England