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It looks like the buy to let rental market is here to stay, with renting more affordable than buying property across the UK.
Lettings platform, Bunk, looked at which was more affordable in the property market out of buying and renting, and how this differs across the UK.
They looked at the cost of a rental deposit and the cost of renting for a decade, then compared this cost to the financial barrier of a mortgage deposit, and the cost of monthly mortgage payments over a 10-year fixed term at a rate of 2.58 per cent.
Across the UK the average monthly rent is £676. With the newly introduced five-week cap, that means a rental deposit costs an average of £845 and renting at this average monthly rate over a 10-year period would cost a total £81,120 – a total cost of £81,965 when including the deposit.
The current average UK house price is £226,798 and so a 10 per cent deposit would set you back £22,680. This leaves a loan amount of £204,118 and at a 10-year fixed rate of 2.58 per cent would mean a total repayment of £231,798, a total of £254,478 including the deposit.
This means, that renting is certainly more affordable at £172,513 cheaper than owning a home over a 10-year period when it comes to the upfront and monthly costs, with the one big difference being the bricks and mortar investment secured at the end.
This most notable saving was found in Cambridge, with a difference of £341,090 over 10-years between renting and buying, with the saving in London also topping £316,247.
In Bournemouth, renting over 10-years is £183,376 cheaper than buying, with Bristol (£177,613), Edinburgh (£166,547), Cardiff (£143,984), Southampton (£138,617), Portsmouth (£137,240) and Plymouth (£128,480) all home to some of the biggest savings.
The lowest saving was in Glasgow where renting for 10-years is just £43,145 cheaper than buying in the city, though still certainly more affordable.
Co-founder of Bunk, Tom Woolard, commented: ‘Of course the big difference between renting and buying is that one leaves you with a sizable financial asset as a reward for your years of hard work making mortgage payments.
‘However, more and more of us are opting to rent long-term and what we wanted to highlight is that while the rental market is generally viewed in a negative light due to high rental costs, it is actually a considerably cheaper option when compared to home ownership, even with almost record low-interest rates.’