New research from Hamptons has found most first-time buyers with a 5% deposit will encounter a big hike in their monthly outgoings when they get on to the property ladder.
Read on to find out what's happening to the cost of buying a home where you are and for advice on when things might start to look better for first-time buyers.
Where mortgage repayments outstrip the cost of renting
Owning a home is cheaper in just two regions of Great Britain - Scotland (by £16 a month) and the North East of England (£59).
Perhaps unsurprisingly, prospective first-time buyers face the biggest hike in outgoings if they buy in more expensive areas such as London or the South East of England.
The impact of high mortgage rates
High mortgage rates have been commonplace for about eighteen months, and they continue to be a major barrier for people trying to buy.
Hamptons says that when rates were lower, someone buying with a 5% deposit would usually pay the same or less on mortgage repayments as they did on rent.
Hamptons says this would need to fall to 4.2% to equalise the cost of buying and renting. In London, the average rate would need to drop to 3.6%.
Find out more:The benefits of owning a home
Buying versus renting isn't a black-and-white decision, but if you can afford to make a move, there are lots of benefits to owning your own home.
Paying a mortgage rather than rent allows you to build your equity in a property over time until you eventually own it outright. This means your money is being put to use as a long-term investment rather than being sunk into someone else's property. This provides you with an asset and greater long-term financial security.
You'll also have the freedom to do what you want to a property you own when it comes to decoration, furnishings and renovation. Ultimately, you'll be living somewhere that is truly 'yours' and won't need to worry about the danger of rent rises or your landlord selling up.
Find out more:When renting can make sense
All of this said, renting can also have some benefits, especially if you've got a good landlord who is communicative and takes care of the property.
Firstly, it may be that renting offers a level of convenience that homeownership wouldn't, for example, if you're renting in an area where you'd be priced out of buying.
There's also the fact that if something major goes wrong, such as the boiler breaking, you won't be responsible for fixing it.
Is it going to get easier for first-time buyers?
It might seem like a bleak time for buyers at the moment, but there are hopes that things could change.
Aneisha Beveridge, head of research at Hamptons, says: 'High mortgage rates have squeezed buyers with small deposits out of the market, forcing more households to rent for longer.
'The uplift in the monthly cost to buy a home with a small deposit has made purchases unviable in most places south of Birmingham. The extent to which the Bank of England reduces rates will shape the numbers of buyers with small deposits more than even the best-designed government policy.'
What's happening to the cost of renting?
The latest Hamptons data shows that rents are still rising but that price growth appears to be stabilising somewhat after the double-digit increases last year.
Overall, rent prices were up 6.3% year-on-year in May, but price growth for tenants renewing their existing contracts was higher, at 8.8%.
Hamptons says the slowdown in rent rises has largely been driven by inner London, where prices have fallen by 2.3% year-on-year.
The table below shows the latest average rents for properties across Great Britain.
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