Rent beats buying for Brits as mortgage costs jump
Rent beats buying for Brits as mortgage costs jump
Rightmove analysis shows a typical new mortgage payment now costs more than renting, reshaping housing choices as rates rise.
Across Britain, a shift is unfolding in who pays more for shelter. A recent analysis by Rightmove found that a typical new mortgage payment now costs more than the average rent, a development that's drawing attention in housing markets already rattled by higher borrowing costs. Analysts point to mortgage rates climbing since March, a rise helped by global tensions and market adjustments triggered by the Iran situation, which pushed lenders to reprice deals for new borrowers. The upshot is that for many would-be homeowners, monthly repayments have become less affordable than securing a rental home in many parts of the country.
That doesn't mean rents are collapsing. In many areas, rents have held relatively steady even as the cost of buying climbs. For Britons weighing the options, renting is starting to look like the cheaper route in the near term, especially for those who do not have a large deposit or who are cautious about locking in a long-term loan at rising rates. The shift could ripple through the housing market, with fewer new buyers and more competition among renters for available properties. The dynamic complicates plans for first-time buyers, renters paying over the odds, and landlords adjusting to a changed demand mix.
Experts say the trend may be temporary if rates stabilize or fall, but for now many households are choosing to rent rather than buy. Policymakers and lenders may need to address affordability head-on, from deposit requirements to loan criteria, to help households navigate a market where the balance between rent and mortgage costs continues to tilt in favor of renting.
