A study comparing current prices to the monthly rents of two-bedroom flats in the top 50 markets in Britain reveals that buying a home has become less expensive than renting one in three-quarters of these areas.
In 74% of the places studied, the monthly morgage payment is 8% lower on average than the monthly cost of rent. Even in London, which has some of the highest home prices in the country, it has become more cost-effective to buy, as it also has the highest rental rates in Britain. The average rent for a two-bedroom flat in London is £2,155, compared to the average home sales price of £446,345.
However, if interest rates were raised by only 1%, renting would become a more cost-effective option than buying in 80% of the places included in the study.