New research compares the cost of buying versus renting
First-time buyers across Great Britain are paying, on average, 20% less per month on mortgage repayments than renters, according to new analysis from property website Zoopla.
The research shows that the typical first-time buyer mortgage payment is £1,038 per month, compared to an average rent of £1,248.
The analysis is based on a 20% deposit, which equates to £50,740 for a home priced at £253,700 — the average cost of a first-time buyer property. In London, where affordability constraints are greater, first-time buyers typically put down a larger deposit of around 30% to secure a mortgage.
Zoopla’s study, which examined housing costs in 118 postal areas, found that buying is cheaper than renting in most parts of the country, with the exception of the East of England, where mortgage repayments are 9% higher than rents. The difference is narrow in the South East and East Midlands, while the North East shows the biggest gap, with mortgage payments 24% lower than rental costs.
Some regions show particularly large savings for buyers. In Glasgow, monthly mortgage payments are 46% lower than rent, while Newcastle (-34%), Liverpool (-31%), Edinburgh (-32%), and Cardiff (-31%) also show significant cost advantages for buyers.
However, in 10% of postal areas, renting remains the more affordable option. Harrogate tops the list, where mortgage costs are 15% higher than rent, followed by Watford at 7% higher. In areas with high house prices, affordability barriers prevent many first-time buyers from purchasing, increasing demand for rental properties and driving rents up further.
The upfront cost of a deposit remains a key obstacle, ranging from £27,700 in the North East to £83,400 in London. Many first-time buyers rely on family assistance, with 63% reporting financial help from relatives.
Strict mortgage regulations introduced in 2015 also create additional hurdles. Borrowers must prove they can afford higher interest rates as part of stress testing requirements, which currently assess affordability at around 8%. This increases mortgage costs above rental payments in some areas—rising 10% above rents in the North East and over 50% in the East of England.
“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,” said Richard Donnell (pictured), executive director at Zoopla.
However, he cautioned that regulatory requirements make it harder for buyers with average incomes or small deposits to secure mortgages, even if they can comfortably afford rent.
“Proposals to review regulations around mortgages are welcome,” Donnell said. “We do not want to return to the loose lending that preceded the global financial crisis. A modest loosening in lending rules with mortgage stress testing rates closer to 6-7% 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.”
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