THE PROPERTY FILTER TAKE
Mortgage payments are cheaper than local rents in 41% of local authority areas across England and Wales, based on ONS first-time buyer data analysed by Pepper Money in July 2026.
In the North East, where average local rents run at £781 per month (ONS), the average first-time buyer mortgage of £699 means your tenants could own for less than they pay you each month.
You may wish to stress-test your portfolio against extended voids in markets where tenant-to-buyer conversion risk is highest - the Property Filter stress test calculator can model the yield impact.
Monthly mortgage payments are now cheaper than local rents in 41% of local authority areas across England and Wales. In the North East, buying beats renting in almost every single area.
The ONS Data Behind the Headlines
Pepper Money's First-Time Buyer Index was published on 7 July 2026. It used Office for National Statistics (ONS) data to compare property prices, mortgage costs, local rents, and earnings across every local authority in England and Wales.
The average first-time buyer property costs £261,700, per ONS figures. The average monthly rent for a three-bedroom home across England and Wales is £1,269, according to the same Pepper Money analysis.
The ONS's own July 2026 bulletin, released 22 July 2026, found average UK monthly private rent rose 3.3% to £1,388 in the 12 months to June 2026. In England the figure reached £1,446. Wales averaged £843. Scotland averaged £1,012.
The North East posted the steepest rent inflation of any English region at 6.3%, per the ONS. Yet it still has the lowest average rent in England at £781 per month.
Where Buying Beats Renting - and by How Much
Middlesbrough topped the Pepper Money index. Its average property price of £123,831 produces monthly mortgage payments of around £607 - £157 less than local rents each month, a saving of £1,882 per year.
Burnley ranked second, with the lowest deposit requirement across the full index at £11,595. Buyers there save £114 per month over renting, or £1,374 per year.
Thirteen of the top 20 locations are in the North East or North West. Every North East local authority except Northumberland has monthly mortgage payments lower than local rent. The average North East mortgage sits at £699 per month, against a national average of £1,310, per Pepper Money's data.
In the North West, 69% of areas have mortgages cheaper than local rent. Manchester has an average property price of £232,888. Even so, buyers there save more than £3,000 per year - city-centre rents average £1,406 per month against a mortgage of £1,142.
Southampton offers the biggest annual saving among the top ten at £3,924, or £327 per month. A further 94 areas sit within £100 per month of mortgages beating rent.
What This Means for Landlords and Tenants
What your tenants are thinking: in Middlesbrough, Burnley, County Durham, and across most of the North East, monthly mortgage payments are already below what tenants pay in rent. The North East average rent of £781 per month (ONS) sits above the regional average mortgage of £699. For any tenant with a stable income and a growing deposit, the monthly cost case for renting in the North East is gone.
That does not mean mass movement into ownership. Deposits remain a real barrier. Burnley's lowest-in-index deposit of £11,595 is still a substantial sum. And not every tenant qualifies for a mortgage.
But void risk is real in these markets - especially if rates fall further or house prices continue to soften across the North.
Check local rental demand in areas where buying pressure is highest using the Property Filter LHA rates map. The negotiation and finance hub covers stress-testing acquisitions where rent-versus-buy dynamics are shifting. For investors new to northern markets, the property investment strategies hub sets out how to weigh these factors before committing.
Key takeaways
Mortgage payments beat local rents in 41% of English and Welsh local authority areas, per Pepper Money's ONS-based First-Time Buyer Index (July 2026).
The North East averages £699/month for mortgages against a local average rent of £781 (ONS) - buying already beats renting across almost the whole region.
Middlesbrough: average property £123,831, mortgage ~£607/month, saving £1,882/year over renting.
Average UK private rent: £1,388/month, up 3.3% year-on-year, per the ONS July 2026 bulletin.
A further 94 areas are within £100/month of mortgages becoming cheaper than local rents.
Monthly mortgage payments are now cheaper than local rents in 41% of local authority areas across England and Wales. In the North East, buying beats renting in almost every single area.
The ONS Data Behind the Headlines
Pepper Money's First-Time Buyer Index was published on 7 July 2026. It used Office for National Statistics (ONS) data to compare property prices, mortgage costs, local rents, and earnings across every local authority in England and Wales.
The average first-time buyer property costs £261,700, per ONS figures. The average monthly rent for a three-bedroom home across England and Wales is £1,269, according to the same Pepper Money analysis.
The ONS's own July 2026 bulletin, released 22 July 2026, found average UK monthly private rent rose 3.3% to £1,388 in the 12 months to June 2026. In England the figure reached £1,446. Wales averaged £843. Scotland averaged £1,012.
The North East posted the steepest rent inflation of any English region at 6.3%, per the ONS. Yet it still has the lowest average rent in England at £781 per month.
Where Buying Beats Renting - and by How Much
Middlesbrough topped the Pepper Money index. Its average property price of £123,831 produces monthly mortgage payments of around £607 - £157 less than local rents each month, a saving of £1,882 per year.
Burnley ranked second, with the lowest deposit requirement across the full index at £11,595. Buyers there save £114 per month over renting, or £1,374 per year.
Thirteen of the top 20 locations are in the North East or North West. Every North East local authority except Northumberland has monthly mortgage payments lower than local rent. The average North East mortgage sits at £699 per month, against a national average of £1,310, per Pepper Money's data.
In the North West, 69% of areas have mortgages cheaper than local rent. Manchester has an average property price of £232,888. Even so, buyers there save more than £3,000 per year - city-centre rents average £1,406 per month against a mortgage of £1,142.
Southampton offers the biggest annual saving among the top ten at £3,924, or £327 per month. A further 94 areas sit within £100 per month of mortgages beating rent.
What This Means for Landlords and Tenants
What your tenants are thinking: in Middlesbrough, Burnley, County Durham, and across most of the North East, monthly mortgage payments are already below what tenants pay in rent. The North East average rent of £781 per month (ONS) sits above the regional average mortgage of £699. For any tenant with a stable income and a growing deposit, the monthly cost case for renting in the North East is gone.
That does not mean mass movement into ownership. Deposits remain a real barrier. Burnley's lowest-in-index deposit of £11,595 is still a substantial sum. And not every tenant qualifies for a mortgage.
But void risk is real in these markets - especially if rates fall further or house prices continue to soften across the North.
Check local rental demand in areas where buying pressure is highest using the Property Filter LHA rates map. The negotiation and finance hub covers stress-testing acquisitions where rent-versus-buy dynamics are shifting. For investors new to northern markets, the property investment strategies hub sets out how to weigh these factors before committing.
Key takeaways
Mortgage payments beat local rents in 41% of English and Welsh local authority areas, per Pepper Money's ONS-based First-Time Buyer Index (July 2026).
The North East averages £699/month for mortgages against a local average rent of £781 (ONS) - buying already beats renting across almost the whole region.
Middlesbrough: average property £123,831, mortgage ~£607/month, saving £1,882/year over renting.
Average UK private rent: £1,388/month, up 3.3% year-on-year, per the ONS July 2026 bulletin.
A further 94 areas are within £100/month of mortgages becoming cheaper than local rents.
Frequently asked questions
Frequently asked questions
Where is it cheapest to buy versus rent in the UK right now?
Will this prompt tenants to leave the rental market?
What government data underpins these findings?
