It may pay to buy a home rather than rent

Monthly mortgage interest payments on a two-bedroom property are typically 8 per cent lower than the cost of renting a comparable home, according to property website Zoopla.co.uk.

Dundee is the town in which people can the save the most on monthly housing costs by buying rather than renting, with mortgage payments on a two-bedroom property averaging 368 a month, considerably lower than typical rents of 530.

People are also better off buying in Birmingham rather than renting, where monthly mortgage payments average 548, compared with rent of 765.

Derby, Cambridge and Milton Keynes make up the top five places in which it is cheaper to buy a home.

But at the other end of the scale, average rents of 493 on a two-bedroom property in Huddersfield are considerably lower than mortgage payments of 612.

People could save an average of 89 a month by renting rather than buying a property in Oldham, while rents are more than 100 cheaper than mortgage payments in Brighton and 73 cheaper in Swansea.

But the group said that while buying a property is currently cheaper than renting in the majority of places, based on a mortgage rate of 5 per cent, if interest rates rise by 1 per cent and rents stay the same, it would be cheaper to rent a home in 80 per cent of the locations looked at.

Nicholas Leeming, commercial director of Zoopla.co.uk, said: "Conventional wisdom that buying is better than renting in the property market holds true for most places around the country.

"However, there are places where renting is the better option which may be driven by an excess of buy-to-let flats or a shortage of properties for sale."