Londoners renting in the private sector are paying a 15% premium over the cost of buying, according to new figures from Halifax.
The bank says the gap between the costs of buying and renting has widened by £21 per month over the past year.
The gap is widest in London with home owners now paying around £193 less than the average renter (£1,101 against £1,294).
Buyers in the capital are more than three times better off than the next biggest savers (Northern Ireland, £60pm) and almost 4 times better off then homeowners in the rest of the South East (£51).
According to Martin Ellis, housing economist at Halifax, “concerns over job security and raising a deposit are the main obstacles to people buying their own home.”
Publication of the the figures comes just weeks before the start of the new tax year when thousands are expected to join the ISA season in London, taking advantage of the tax benefits of an ISA to save a deposit for their first home.
Mr Ellis added: “Once homebuyers are on the first rung of the ladder, their monthly costs are notably lower.”
London is facing a shortage of new homes, with demand outstripping supply thanks to continued growth in the capital’s population. Forecasts suggest the number of people living in London will rise by as much as a million over the next two decades.
Last year a poll found that six in ten renters and half of all private sector renters didn’t expect to be able to afford to buy their own home.
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