New research suggests first-time buyers may pay significantly less in mortgage payments than renters—if they can afford a sizable deposit. According to Zoopla, homeownership is cheaper than renting in most of Britain, but affordability remains a major hurdle for many.
Homeownership vs Renting: A Changing Dynamic
Many potential homebuyers have been forced to reevaluate their alternatives due to rising rental expenses.
Those who can obtain a mortgage with a one-fifth down payment may see their monthly payments be about 20% less than the average rent in Britain, according to Zoopla, as reported by The Independent. But raising the necessary money is still difficult, especially in places where real estate costs are greater.
The analysis suggests the average first-time buyer mortgage payment could amount to £1,038 per month, compared to the typical rent of £1,248. However, to access these savings, buyers would need to put down an estimated £50,740—a barrier that continues to keep many in the rental market.
Regional Disparities in Housing Costs
Zoopla’s research highlights significant regional variations in the cost of buying versus renting. The North East of England presents the biggest gap, where mortgage payments are estimated to be 24% lower than rents. In contrast, the East of England bucks the trend, with buying proving more expensive than renting by around 6%.
Other key findings include:
- Scotland, Wales, and the North West also show substantial gaps, with mortgage payments typically 19% to 21% lower than rental costs.
- In London, where house prices are significantly higher, the gap is just 6%, with average mortgage payments at £1,708 compared to £1,822 in rent.
- Areas such as Harrogate and Watford were among the exceptions, where buying was found to be more expensive than renting.
The findings underscore the complex housing landscape, where affordability is determined not just by mortgage rates but also by regional property values and deposit requirements.
Calls for Mortgage Reform
While homeownership offers long-term financial benefits, mortgage regulations remain a hurdle for many.
According to Zoopla, regulations introduced in 2015 to prevent a housing bubble have made it difficult for middle-income earners to transition from renting to buying. Despite demonstrating the ability to afford rent, many struggle to meet stringent mortgage criteria.
The Financial Conduct Authority (FCA) recently acknowledged these challenges, stating that it is reviewing mortgage rules to improve accessibility for first-time buyers. On Friday, it pledged to take “swift action” to support those looking to get onto the property ladder.
Richard Donnell, executive director at Zoopla, emphasised the need for a “modest loosening” of mortgage lending rules. He warned that if more renters remain locked out of homeownership, pressure on the private rental market will continue to drive rents higher.
While the findings suggest homeownership can be cheaper in many regions, raising a deposit remains a major obstacle—one that continues to fuel the housing affordability debate across Britain.
