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Aberdeen is most cost-effective place in UK to get on property ladder

Aberdeen is the most cost-effective place in Britain to get on the property ladder while London is the best location for renting rather than buying, a property website has found.

Someone buying a property in Aberdeen with a 10% deposit can expect to be better off than if they had rented after just one year of home ownership, according to Zoopla.co.uk.

But in London, it would take a projected 18 years for someone with a 10% deposit to be better off financially compared with the situation if they had rented, the website calculated.

Zoopla also named Dundee, Glasgow, Cambridge, Edinburgh, Coventry, Newcastle and Manchester as the locations where buying a property is most likely to beat renting.

The buy-versus-rent index compares the costs associated with buying and renting to predict the length of time it could typically take for buying to become more cost-effective than renting across the largest towns and cities in Britain. Average asking prices for homes and rents in these areas were taken from Zoopla's website.

The index assumes someone has a 10% deposit and a 25-year repayment mortgage. It also factors in costs associated with being a home owner, such as stamp duty, agents' fees and ongoing maintenance. Rising rents and property prices are also taken into account in the forecasts.

Out of the 50 major towns and cities looked at, there were just five - London, Bournemouth, Huddersfield, Bedford and Swansea - where someone who climbed onto the property ladder now would still be financially worse off after seven years than if they had continued to rent according to the findings. Seven years is the length of time that people typically stay in a property they have bought.

In Aberdeen, Zoopla found the average property asking price is £206,060 compared and the monthly rent asked for by landlords is around £1,275. Meanwhile, in London, the average asking price for a property listed on Zoopla's website in February was over four times that in Aberdeen, at £896,124. The typical monthly rent demanded in London is £2,619.

After seven years of home ownership, Zoopla calculates that a buyer in Aberdeen would be £99,040 better off than if they were still renting. A Dundee home owner would be £54,378 better off after seven years while someone in the same position in Glasgow would be £40,971 better off than if they had remained as a tenant.

Meanwhile, a London home owner would still be more than £82,000 worse off after seven years than if they had continued renting, according to Zoopla.

Calls have recently been made for stronger curbs to be placed on the housing market as fears have been raised that prices in the English capital are showing signs of entering "bubble" territory amid continued strong interest from overseas buyers.

Recent Land Registry figures showed that house prices across London surged by 11.2% over 2013 - more than double the rate of price increases across the country generally.

Lawrence Hall, spokesman for Zoopla, said: "Despite taking longer to be better off financially, London remains the holy grail in terms of property investment."

He continued: "It is important to remember that whilst renters may be better off in the short to medium term in some areas of the country, buyers are making a long-term investment.

"With most buyers opting for mortgage terms of 25 years, over the long term buyers are likely to be better off compared to those who choose to rent."

Here are the best locations for buying a property, with the average property asking price this month followed by the average rental asking price and the amount of money that Zoopla calculates a buyer with a 10% deposit would be better off by after seven years:

1. Aberdeen, £206,060, £1,275, £99,040

2. Dundee, £96,103, £653, £54,378

3. Glasgow, £139,841, £722, £40,971

4. Cambridge, £337,586, £1,334, £28,878

5. Edinburgh, £224,000, £948, £32,725

6. Coventry, £191,833, £849, £33,730

7. Newcastle, £180,516, £812, £33,726

8. Manchester, £178,069, £781, £29,751

9. Milton Keynes, £264,038, £1,066, £25,345

10. Birmingham, £163,594, £719, £27,171

Here are the best locations for renting a property, with the average property asking price this month followed by the average rental asking price and the amount of money that Zoopla calculates a buyer with a 10% deposit would be worse off by after seven years:

1. London, £896,124, £2,619, £82,412

2. Bournemouth, £380,206, £1,024, £49,082

3. Huddersfield, £177,119, £561, £7,680

4. Bedford, £288,598, £959, £7,306

5. Swansea, £185,373, £631, £20

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Finance

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