Cheaper borrowing and rising wages mean buying now beats renting on around 40% of homes for sale, especially in northern England and Scotland
Around 40% of properties currently on the market are now cheaper to purchase with a mortgage than to rent, assuming a 20% deposit, according to Zoopla – up from just 25% a year ago.
For first-time buyers, that shift marks a meaningful turn in the affordability tide after two years of punishing rate rises and shrinking borrowing power.
The improvement reflects both lower mortgage rates and changes to lender stress testing. Many banks are now assessing affordability at around 6.5%, down from 8.5% last year, enabling more would-be buyers to borrow enough to compete with local rents. For advisers, that opens up a larger pool of clients who can now clear affordability hurdles that would have blocked them in 2025.
Rates at four-year lows – a narrow but real window
New mortgage pricing has fallen to its lowest level in four years, with two- and five-year fixes dipping below 4% for the first time since 2022. That has been enough to trigger a clear rebound in demand, even though few expect rates to fall dramatically further this year.
For first-time buyers, the combination of sub-4% fixes and gentler stress tests is particularly powerful. Many are coming from record-high rents and find that, on the right product and term, monthly mortgage payments can now undercut what they are paying their landlord.
At the same time, wage growth has been doing some quiet heavy lifting. Average earnings have outpaced house price growth for three consecutive years, slowly rebuilding the affordability eroded during the spike in borrowing costs. Brokers are increasingly able to show clients that the numbers now stack up in ways they simply did not 18–24 months ago.
Regional hotspots where FTBs can act now
The “cheaper to buy than rent” dynamic is strongest in northern England and Scotland. In both the North East and Scotland, more than half of homes listed for sale are now cheaper to service on a mortgage than to rent, with the North West not far behind.
These are markets where first-time buyers with stable incomes and a reasonable deposit can make meaningful inroads, and where advisers can position themselves as key guides through a more favourable – but still complex – landscape.
By contrast, London and parts of the Midlands remain more challenging. In these higher-priced regions, fewer than 40% of homes are cheaper to buy than rent once mortgage costs, stamp duty and other purchase expenses are factored in. Here, the adviser’s role often shifts towards longer-term planning: exploring higher LTV options, boosting deposit-saving strategies, or helping clients look slightly further afield for better value.
Activity rising, but prices remain contained
Zoopla’s figures show sales agreed running at one of the strongest February levels of the past decade, even if activity remains around 3% below the very strong start to 2025. February is also on track to deliver the highest number of fresh listings for the month in 10 years, leaving 6% more homes on the market than a year ago.
For first-time buyers, that means more choice and a bit more negotiating power than in the ultra-competitive markets seen earlier in the cycle. Despite this firmer backdrop, price growth is still subdued: UK house prices were up just 1.3% in the year to January, down from 1.8% annual growth a year ago.
Northern Ireland is leading the pack with 8% annual growth, followed by the North West at 3.3%, Scotland at 2.8% and the North East at 2.5%. Among the major cities, Liverpool and Glasgow posted gains of 4% and 3% respectively, with Manchester, Sheffield, Newcastle, Leeds, Birmingham, Edinburgh and Cardiff also recording modest rises.
Southern England presents a more subdued picture. Prices are broadly flat across many markets, with small declines in London, Southampton, Portsmouth, Cambridge and Bournemouth, and only marginal gains in Bristol, Oxford and Aberdeen. For first-time buyers, flat prices combined with lower rates can be an opportunity to step in without chasing a rising market.
‘Best time in years’ – and a clear advisory opportunity
Richard Donnell, executive director at Zoopla, describes the current backdrop as a more stable and balanced market, despite the uptick in activity. Subdued house price inflation, he argues, is positive for both buyers and sellers, with more vendors coming to market and signalling a strong desire to move.
“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,” he said.
For mortgage advisers, this creates a clear call to action: many long-squeezed renters can now be brought back into the conversation through updated affordability assessments and side-by-side rent-versus-buy comparisons, while regional hotspots in the North and Scotland provide powerful case studies where brokers can demonstrate tangible monthly savings from purchasing.
Even in tougher markets such as London and the Midlands, advisers can add value by structuring applications carefully, exploring lender niches, and guiding clients towards realistic locations and property types.
Looking ahead, Donnell expects only modest price inflation through 2026, which should help sustain healthy transaction levels while avoiding a rapid run-up in values that would shut first-time buyers out again. Sellers, he adds, will still need to rely on local agents – and, crucially, well-structured mortgages – to secure the right strategy for their move.
