London the only British city where renting a flat is cheaper than buying, research finds

Paying off a mortgage on a property costs less per month than renting in 49 out of the 50 largest British cities

A woman looks out from a residential development in the London borough of Tower Hamlets (Getty)

London is the only city in Britain where renting a two-bedroom flat is cheaper than the mortgage payments on it, according to new research.

Buying a property is cheaper than renting in 49 out of the 50 largest British cities, analysis by Zoopla found. Renters in London pay £1,840 versus the average monthly mortgage repayment of £2,168 - a £328 gap.

Across all of the cities in the study, the average monthly mortgage payment for a two-bedroomed flat was between £564 and £136.47 less than the £700.47 average rent payment. The numbers were based on an 85 per cent loan-to-value mortgage and an average asking price of £149,539.

Rental property could be about to get even more expensive, according to the research. It found that 57 per cent of estate agents predict an increase in the number of renters joining the market next year, while only 30 per cent think more rental properties will come available to meet this demand.

Homeowners in the North of England and Scotland have the lowest mortgage payments compared to rental values.

Glasgow tops the list of locations where monthly mortgage repayments are cheaper than rent, with homeowners paying 57 per cent less than renters.

Bradford and Dundee came in next with a cost of servicing a mortgage of 53 per cent (£207) and 52 per cent (£225) cheaper than renting a property, respectively. The northern towns of Middlesbrough, Doncaster, Barnsley and Warrington also feature in the top 10.

In the affluent Southern towns of Brighton and Cambridge there is just a one per cent gap between the cost of renting and buying.

“These figures demonstrate that renters across Britain are paying a premium compared to homeowners servicing a mortgage. Now only London appears a preferable city for renting,” said Lawrence Hall, spokesperson for Zoopla.

“However, the recent announcement of a rise in threshold for the stamp duty tax may encourage more first-time buyers on to the market, so it will be interesting to see whether this boost for first time buyers impacts property prices in the near future.”