In an unusual boost for the benefits of the private rental sector, new data suggests tenants routinely rent in more expensive locations than those where they eventually buy.
Countrywide says some 51 per cent of tenants across the UK who go on to buy a home do so outside the town or city where they were renting - this is compared to 38 per cent seven years ago.
In London about 36 per cent who take their first steps on the housing ladder end up living outside the M25, up from 21 per cent in 2008
Renters who bought a home in the last year, did so in locations where the average house price was £35,000 lower than where they were renting. This was £93,000 lower for London renters
Tenants in the south of England tend to move furthest to get on the housing ladder. Across London and the south east house prices have increased 42 per cent since 2012, rising from £218,000 to £375,000. Over the same period rents have only increased 19 per cent from £1,000 to reach £1,234 a month.
Further north, however, a rather different picture starts to emerge.
In some of the less expensive areas of the country, tenants tend to be less constrained by affordability when making the move into homeownership. Tenants buying in the north east, north west and Yorkshire tend to buy in similarly priced areas to where they are renting.
The average difference in price between where they were renting and where they bought is just £8,000. In a number of the cheapest northern cities such as Newcastle, the average tenant buying their first home actually moves from a cheaper area to a more expensive one.
In addition to affordability, space is a deciding factor of where tenants choose to purchase.
Irrespective of location, those tenants making the move further afield also tend to buy the largest homes. Nationally, 32 per cent of renters who buy in the same town buy a home with three or more bedrooms, a figure which rises to 45 per cent amongst those buying elsewhere.
“Renting enables many tenants to live in areas where they could not afford to buy but that means aspiring home owners often have to look elsewhere to find a home they can afford. It’s common for first time buyers to make sacrifices to buy their first home, so with price rises in recent years outstripping income growth, more are choosing to bypass rising prices by looking further for cheaper areas” says Johnny Morris, research director at Countrywide.
“Renters are getting older too. With over 30s and families the fastest growing types of tenants, renters buying their first home are getting older and are more likely to do so at a later stage of life. They’re skipping owning the small central city flat, in favour of the larger family home the first time around” he says.