Editor's note: This brief was summarised by The Property AI Newsroom from a report by Property Industry Eye. Read the original article for full details.

Study: Buying Cheaper Than Renting in 41% of Local Markets

Monthly mortgage payments are lower than local rents in 41% of local authority areas across England and Wales, according to analysis by Pepper Money. The North East has emerged as the best region for first-time buyers, based on the lender’s First-Time Buyer Index.

Pepper Money’s index, which uses Office for National Statistics data, compared property prices, rents, mortgage costs, earnings, and deposit requirements to assess value for first-time buyers. The study found that the average first-time buyer property in England and Wales costs £261,700, while the average monthly rent for a three-bedroom home is £1,269.

Northern England dominated the rankings for first-time buyer affordability, with 13 of the top 20 locations in the index located in the North East or North West. Middlesbrough was ranked highest, followed by Burnley and Merthyr Tydfil, reflecting lower house prices and stronger affordability relative to local earnings.

Rugby was the only location in the top ten where renting was cheaper than buying, by £44 a month, due to high local earnings compared to house prices. Every North East local authority except Northumberland had lower estimated monthly mortgage payments than local rents.

Manchester and Salford, despite higher average property prices, ranked highly because elevated rental costs meant buyers could save more than £3,000 a year by purchasing rather than renting. Southampton offered the largest annual saving for buyers among the top ten locations, at £3,924.

The analysis also identified 94 local authority areas where monthly ownership costs were within £100 of renting.

These findings may be relevant for letting agents and inventory clerks monitoring regional affordability trends and advising clients on local market dynamics.