Home owners in Glasgow fare particularly well compared with people who rent a property there, according to the research. Mortgage payers in Glasgow may find themselves in the position of parting with an average of £450 per month, while renters there fork out an average of £596 – a difference of £146.
Zoopla compared the average monthly rents being asked for a two-bedroom home across 50 cities with the cost of paying a mortgage on a similar-sized property with a 10 per cent deposit – the size of deposit often put down by first-time buyers.
It found in 60 per cent of cities, buying a home was more cost-effective than renting one. The proportion has increased since April, when buying was more cost-effective than renting in 48 per cent of cities.
Dundee came in at sixth on the list with the average rent coming in at £526 and a mortgage costing £448 – a difference of 16 per cent. Owning a home in Birmingham and Bradford rather than renting one was also found to be particularly cost-effective. But in southern England, where house prices can be particularly high, renting often works out cheaper. London was found to be the city where renting was particularly likely to beat buying, in terms of the monthly costs, followed by Cambridge and Bournemouth. In London, renting can work out £1,118 cheaper per month than having a mortgage, while in Cambridge the cost difference per month can work out at £549.
The research assumed that a mortgage holder would be on a 25-year repayment deal with a fixed interest rate of 4.5 per cent to make the findings.
Zoopla also analysed the current asking prices and rents of two-bedroom properties currently on the market across Britain’s 50 biggest cities for the research.
Lawrence Hall, a spokesman for Zoopla, said: “Buying a property is a costly process, but once you get past the initial fees, it can – as our data shows – prove a more economical option on a monthly basis.
“Although large parts of Britain remain unaffordable for those looking to take their first steps on to or another step up the property ladder, these figures tell an encouraging story.
“Whereas back in April it was cheaper to service a monthly mortgage than pay a rental fee in just under half of Britain’s biggest cities, buyers are now offered better value in nearly two-thirds of these locations.”