ABERDEEN is the most cost-effective place in Britain to get on the property ladder while London is the best location for renting rather than buying, according to research by property website Zoopla.
Someone buying a property in Aberdeen with a 10% deposit can expect to be better off than if they had rented after just one year of home ownership, according to the research.
But in London, it would take a projected 18 years for someone with a 10% deposit to be better off financially compared with the situation if they had rented, the website calculated.
Dundee, Glasgow and Edinburgh are also among the locations where buying a house works out to be substantially cheaper than renting.
Zoopla compared the costs associated with buying and renting to predict the length of time it could typically take for buying to become more cost-effective than renting. The date assumes mortgages are taken on a 25-year repayment basis, with a 10% deposit.
It also factors in costs associated with being a homeowner, such as stamp duty, agents’ fees and ongoing maintenance. Rising rents and property prices are also taken into account in the forecasts.
In Aberdeen, Zoopla found the average property asking price is £206,060 compared and the monthly rent asked for by landlords is around £1,275. After seven years of home ownership, the website calculated that a buyer in Aberdeen would be £99,040 better off than if they were still renting.
A Dundee home owner would be £54,378 better off after seven years, while someone in the same position in Glasgow would be £40,971 better off than if they had remained as a tenant.
Calls have recently been made for stronger curbs to be placed on the housing market as fears have been raised that prices in London are showing signs of entering “bubble” territory amid continued strong interest from overseas buyers.
Recent Land Registry figures showed that house prices across London surged by 11.2% over 2013 - more than double the rate of price increases across the UK generally.
Lawrence Hall, spokesman for Zoopla, said: “It is important to remember that whilst renters may be better off in the short to medium term in some areas of the country, buyers are making a long-term investment.
“With most buyers opting for mortgage terms of 25 years, over the long term buyers are likely to be better off compared to those who choose to rent.”
BEST PLACES TO BUY
1. Aberdeen, £99,040 saved over first seven years of owning a home
2. Dundee, £54,378
3. Glasgow, £40,971
4. Cambridge, £28,878
5. Edinburgh, £32,725
BEST PLACES TO RENT
1. London, £82,412 saved over first seven years by renting a home
2. Bournemouth, £49,082
3. Huddersfield, £7,680
4. Bedford, £7,306
5. Swansea, £20