40% of UK homes are now cheaper to buy than rent
February is on track to record the highest number of newly listed homes for sale in a decade, with 40% of UK homes now cheaper to buy than rent.
This is according to the latest House Price Index from online property platform Zoopla, which said that the UK market is currently looking very good for first-time buyers.
This February saw the number of homes listed for sale rise by 6% compared to the same time last year, and Zoopla said it expects this figure to rise in the coming months, which should curb price increases over the rest of the year.
In other good news for buyers, average mortgage rates for new loans have hit their lowest level for 4 years, thanks to lower base rates and competition between lenders.
Rates on both two-year and five-year mortgages are now below 4% for the first time since 2022.
These factors have led to buying becoming increasingly affordable compared to renting. In February, 40% of homes for sale on Zoopla were cheaper to buy with a mortgage than the cost of renting locally, assuming a 20% deposit.
This is a significant rise in affordability compared to the same time last year, where this was only the case for 25% of homes listed on the platform.
House price growth has remained low, with prices rising by 1.3% over the past year. Regional disparity remains strong, with prices rising by 8% in Northern Ireland and 3.3% in the North West of England, while prices in London fell by 0.2% over the past year.
House prices have stagnated across Southern England, reflecting the stretched affordability of buyers and the already relatively high prices of property in the region.
“Lower mortgage rates and improved affordability of mortgages means now could very well be the best time to buy a home in recent years, especially for first time buyers with more homes available to buy for less than the cost of renting,” said Zoopla executive director Richard Donnell.
“We expect continued modest rates of price inflation over 2026 which will support healthy levels of sales with some wide variations across local markets.”
