The average homeowner will be better off than someone renting within five years, according to new research from Zoopla.

It also revealed that the most cost-effective place to buy was in Scotland with three of the top five best cities to buy north of the border.

In Aberdeen it only takes one year to become better off buying than renting, while Dundee and Glasgow took just two years.

Equity growth

The figures suggest that while renters pay less each month, owners recoup their initial costs and become better off than renters within five years on average as the value of their equity outstrips the value of savings.

Those with mortgages pay £316 more on average per month compared to those renting equivalent properties. The average monthly rental across Britain is £865 a month compared to £1,181 for mortgage payments.

But after five years, the average owner had made the different up and by seven years they are £13,850 better off compared to an equivalent tenant.

Cost-effective

In Aberdeen, Dundee and Glasgow, the average monthly mortgage repayment is actually less than the average rent. In Aberdeen, an average house costs £215,357, with the average mortgage payment being £1,099. Rent, however, costs £1,318 a month on average.

After seven years, the average Aberdonian would be over £103,000 better off if they had bought.

At the other end of the scale, Bournemouth, London and Huddersfield are the least cost-effective places for buyers. This is due to higher property prices relative to rents for equivalent properties.

London owners pay nearly £1,790 more a month than the average renter in the capital.

In Bournemouth, it would take an average buyer 18 years to make up the savings they would make from renting.

Blair Stewart, partner in Strutt & Parker’s Edinburgh office, said: “It is a question of looking at the bigger picture. For prospective homeowners, the initial cost outlays can be daunting but they will reap the benefits in the long term.

"Their monthly repayments will eventually build up into an asset that they can call their own and, for many in a nation preoccupied with home ownership, that is very important. In cases where the average monthly mortgage repayment is less than the average rent, then it makes even more sense to buy rather than rent.”

Long term investment

Zoopla's Lawrence Hall said that while buyers have to swallow the initial upfront costs of purchasing a property, they ultimately reap the benefits over renters down the line from building up equity in an asset that they will own by the end of the mortgage term.

With the strong house price growth Zoopla has seen this year and interest rates still low, saving for even a 10 per cent deposit takes its time.

Search for property to buy or rent in the UK.