Other towns in Scotland, most notably Dundee, Glasgow and Edinburgh and Cambridge in England are also more compelling for buyers but London is more cost effective to rent, according to the research from property website Zoopla.
Bournemouth, Huddersfield, Bedford and Swansea are also better for those choosing to rent rather than buy, the research also shows.
It means that takes buyers in Aberdeen with a 10% deposit just one year of ownership for buying to become more cost effective than renting. The average property price in Aberdeen is currently £206,060 with average monthly rents at £1,275.
London is currently the most renter friendly location in Britain. After seven years, a typical London renter would be £82,412 better off than a buyer with a 10% deposit of an equivalent property.
It would take 18 years for a London buyer with a 10% deposit to begin to be financially better off compared to the equivalent renter. These calculations are based on a conservative estimate of 4% annual house price growth in the capital.
Bournemouth is the second most renter friendly town in Britain. With average asking prices of £380,206 and average rents of £1,024 it would take 22 years for a buyer with a 10% deposit to be better off compared to a renter in an equivalent property. After a seven year period, a typical renter in Bournemouth would be £30,719 better off than a typical buyer with a 10% deposit.
‘Despite taking longer to be better off financially, London remains the holy grail in terms of property investment. It is much more buyer friendly outside the capital but with rising average prices and low savings rates, accumulating a deposit has become increasingly difficult,’ said Lawrence Hall of Zoopla.
‘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,’ he added.
The Zoopla methodology compared all of the costs associated with buying or renting as well as increases in asset or savings value over time. The analysis forecasts the amount of time it will take for buying to become more cost effective than renting across the largest towns and cities in Britain and compares how much buyers or renters are financially better off after the average tenure of a house.
In Dundee with an average asking price of £96,103 and an average monthly rent of £653 buyers with a 10% deposit are £54,378 after seven years. In Glasgow where the average asking price is £139,841 and the average monthly rent £722, a buyer with a 10% deposit is £40,971 after seven years. And in Edinburgh with an average asking price of £224,000 and monthly rent of £948, a buyer with a 10% deposit if £32,725 better off after seven years.
