Renting now more costly
The gap in the cost of renting or buying your home is growing, with spiralling demand for rental property.
Two recent reports show a broad divide in monthly outlay between renting and buying across the UK.
Mortgage lender The Halifax revealed a higher outlay of £130 a month more to rent than own, a gap that has grown by £52 a month over the past year.
Rates have been spurred by lower owning costs of 3 per cent, while renting has increased by 5 per cent. Yet only four years ago it was £324 a month cheaper to rent than own a property, the research shows.
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These figures are seen by property experts as a symptom of today's struggling and inequitable property market. Since 2008 there has been a shortfall of some 100,000 first-time buyers coming to the market each year as poor job prospects, difficult-to-secure loans and ballooning deposits have kept them in rented accommodation.
With around half a million extra people now needing rented accommodation, demand is driving up rents all over the UK which, in turn, makes owning comparatively cheaper.
Property website Zoopla also revealed last week how it is more expensive to rent in nine out of 10 British towns.
The historic city of York topped the list, with renting 69 per cent more expensive than the average property price, followed by Milton Keynes at 41 per cent and Derby at 37 per cent.
Next came Birmingham (35 per cent) and Preston (33 per cent). Leicester came 18th out of the 50 cities surveyed, with rented property costing 25 per cent more per month, at £576, compared to the average asking price for a two-bedroom flat £110,492.
Daniel Maynard, of Your Move in Leicester, said: "There is increasing demand for rented property because people cannot afford to get onto the housing ladder straight away, as they once could, and it takes a long time to save."
Will Ravenshill, Director at Readings Property Group, said that despite the gap, Leicester remains affordable.
He said: "One of the good things about the Leicester market is its stability.
"We don't see massive swings in local house prices or rents in Leicester, which both stay at relatively steady levels."
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