Latest research conducted by a major property portal highlights that in most parts of the UK purchasing a home is more affordable than renting—provided buyers can manage the substantial upfront deposits.

The analysis reveals that first-time buyers typically pay 20% less per month on mortgage repayments compared to renting costs. However, the primary hurdle remains the initial deposit, averaging 20% of the property’s value, which amounts to £50,740 for a standard first-time buyer property.

The portal’s report covering 118 postal areas across Britain reveals considerable savings for homeowners compared to renters. However, the high cost of securing a deposit continues to be a major challenge for many aspiring buyers.

The analysis indicates that in most regions, mortgage payments are notably lower than rental costs as the average first-time buyer’s monthly mortgage repayment amounts to £1,038, calculated at a 4.5% interest rate over a 30-year term. This figure is £246 less per month than the national average rent of £1,284.

Donnell explained that buying is significantly more affordable than renting in many parts of the country, he says: “Our renting versus buying analysis is welcome news for would-be first-time buyers looking to buy their first home, having faced steep increases in rents over the last three years.”

He gave examples of mortgage costs being lower than rents by approximately 30% in cities such as Glasgow, Newcastle, Liverpool, and Cardiff. In the North East, where the average property price for first-time buyers stands at £138,500, a 20% deposit equates to £27,700. Monthly mortgage payments in the region would average £567 offering a notable monthly saving of £181 compared to the average rent of £748.

In some parts of the country, purchasing a home remains more expensive than renting. Harrogate tops the list as the priciest area for buyers, where monthly mortgage payments are 15% higher than rental costs. Similarly, in the Watford postal area, buying is 7% more costly than renting.

Despite the affordability of mortgage payments compared to rent in many regions, the most significant barrier for buyers continues to be securing a deposit. The average 20% deposit for a first-time buyer range from £27,700 in the North East to a substantial £83,400 in London.

Donnell emphasised the significant challenges faced by many young buyers, he said: “There remain challenges facing first-time buyers, especially those on average incomes or with small deposits.”

A majority of first time of buyers depend on family assistance to secure the necessary funds. According to the portal’s findings, 63% of first-time buyers revealed that they received financial contributions from family members to help them purchase their first property.

Donnell says: “Mortgage regulations introduced in 2015 to stop a housing market boom and bust have created a higher hurdle to home ownership for those on middle incomes.

“These buyers can afford to make rental payments but are unable to prove they can afford higher mortgage ‘stress’ rates should borrowing costs increase in the future.”

A majority of first time of buyers depend on family assistance to secure the necessary funds. According to the portal’s findings, 63% of first-time buyers revealed that they received financial contributions from family members to help them purchase their first property.

Donnell maintained that revisiting mortgage regulations could pave the way for more renters to achieve homeownership. “Proposals to review regulations around mortgages are welcome. We do not want to return to the loose lending that preceded the global financial crisis, but a modest loosening in lending rules with mortgage stress testing rates closer to 6-7% would help more middle to higher-income renters access home ownership and ease some of the pressure in the rental market without causing a boom in house prices.”

The research indicates that easing deposit requirements could enable more tenants to transition into homeownership, potentially decreasing the demand for rental properties. However, since high deposits continue to pose a significant obstacle, the rental market is expected to maintain robust demand in the near future.

Tom Edwards, a landlord based in Birmingham, commented that the data highlights the resilience of the rental market, even in the face of rising costs: “Yes, buying is technically cheaper, but most renters simply don’t have the means to put down a 20% deposit. Until that changes, the rental market will stay competitive.”

Donnell cautioned that making homeownership unattainable for first-time buyers would only intensify the strain on the private rental market. “The more first-time buyers priced out of home ownership, the greater the pressure on the private rental market and rental levels.”

Donnell highlighted how difficult this is for many young buyers. “There remain challenges facing first-time buyers, especially those on average incomes or with deposits,” he said.

“Mortgage regulations introduced in 2015 to stop a housing market boom and bust have created a higher hurdle to home ownership for those on middle incomes,” Donnell added: “These buyers can afford to make rental payments but are unable to prove they can afford higher mortgage ‘stress’ rates should borrowing costs increase in the future.”

A landlord from Birmingham, Tom Edwards, said the figures show that the rental market remains strong despite higher costs. “Yes, buying is technically cheaper, but most renters simply don’t have the means to put down a 20% deposit. Until this changes, the rental market will stay competitive.”