In early 2020 it was cheaper to buy than rent in every region of the country. But in May 2021 it was cheaper to rent than buy in seven of Great Britain’s 11 regions. The three northern regions (North East, North West, Yorkshire & Humber) and Scotland bucked the trend and were the only places where it was cheaper to buy.
London has seen the largest shift since the start of the pandemic. A buyer putting down a 10% deposit on a property in the capital will have gone from being £123 per month better off buying in March 2020, to spending £251 per month less on rent in May 2021.
Falling rents in the capital have made renting cheaper relative to buying by a bigger margin than anywhere else. And with rents still falling, the differential looks set to continue growing.
While of course there are pros and cons to both, for buyers with just a 5% deposit, renting becomes even cheaper than buying on a monthly basis. In part, this is due to the increase in interest rates on 95% LTV mortgages over the course of the pandemic. A buyer putting down a 5% deposit will on average spend £195 per month (or 19%) more than if they had carried on renting.