For the first time in 10 months, it has become cheaper to rent a home in Britain than to buy, following a sharp rise in mortgage rates triggered by the war in Iran, according to new figures from Rightmove.
Rental Costs vs Mortgage Payments
The cost of a typical new mortgage payment has overtaken the average rent for the first time since June last year, Rightmove's analysis reveals. The average advertised monthly rent across Britain currently stands at £1,547, which is £123 lower than the average new monthly mortgage payment of £1,670.
Rightmove's mortgage calculation is based on the current average asking price for a home of £373,971 and the average two-year fixed rate in April so far, assuming a buyer has a 20% deposit and a 30-year repayment term.
Drivers of the Shift
The shift has been driven by borrowing costs moving higher since early March, when conflict escalated in the Middle East. This led to swap rates—used by lenders to price mortgages—rising amid volatility in financial markets, prompting lenders to pull numerous mortgage deals from the market. As a result, the average two-year fixed mortgage rate has increased from 4.24% in February to 5.35% in April, Rightmove said.
However, a wave of banks and building societies have been cutting their rates in recent days, signalling more positive sentiment entering the market.
Expert Commentary
Colleen Babcock, Rightmove's property expert, said: “Mortgage payments have risen quite sharply in a short space of time for new buyers. It will be interesting to see whether more would‑be buyers turn to renting temporarily while rates remain high, particularly when monthly costs can exceed average rents and the timing of rate cuts is still unclear.”
Regional Variations
Rightmove's analysis shows that while renting is cheaper on average across Britain, this is not the case in Scotland and the North East, where buying remains cheaper. The gap between rents and mortgage payments varies significantly by region. In the South East, the average monthly rent is £304 less than the average mortgage payment, while in London the gap is £362. In contrast, in the North West, it is only £7 cheaper to rent than buy.
Individual factors such as a larger deposit, borrowing less, or spreading payments over a longer term can lower monthly mortgage costs on a case-by-case basis.
Nathan Emerson, chief executive of Propertymark, said: “This shift highlights the wider economic pressures facing consumers, where affordability challenges are being felt across both renting and buying. While renting may appear comparatively cheaper in the short term, it does not necessarily mean it is more affordable overall, particularly as tenants continue to manage the cost of living and limited housing supply.”
