Buying cost less than renting reports North London Mortgages Broker Wednesday, 14th December 2011

According to the latest statistics from property website Zoopla.co.uk, buying now is more attractive than renting in 47 of the 50 largest towns across the country.

This has been caused by the continued mortgage drought and the rising demand for rental properties has led to renting now costing 15% more on average than buying, up from only 10% more this time last year.

Comparing the rental cost to the cost of ownership based on servicing an interest-only mortgage at 5% p.a.,Zoopla analysed the current asking prices and rents of over 78,000 two-bedroom flats currently on the market.

The most significant display of the margins involved is in London, where the average asking price for 2-bedroom flats currently stands at £442,036, buying also trumps renting by a big margin. With average monthly rents in the capital at £2,416, renting is 31% more expensive than the cost of ownership, leaving renters paying an extra £6,888 annually on average compared to owners.

"Although buying may be more cost-effective than ever compared to renting, many potential buyers arenít able to take advantage because they can't access mortgage finance. "The shortage of financing, especially to first time buyers, has pushed demand for rental property through the roof. But for those lucky enough to be in a position to get a mortgage, there may never have been a better time to buy."Nicholas Leeming of Zoopla.co.uk, said: