RENTING a property in the North East is almost £500 a year more expensive than buying it, it was revealed yesterday.

Higher demand due to worries over job losses coupled with a short supply of properties has pushed up rental prices.

At the same time, falling mortgage interest rates have made buying a home more affordable.

Paying mortgage interest on the average North East home was 8% cheaper last month than the cost of rent.

The gap was bigger than in any other region of the UK apart from London.

It increased steadily since December 2008 – when renting a house was 29% cheaper than buying one nationwide.

Falling mortgage rates made houses more affordable, according to Halifax, which complied the figures.

The mortgage rate for a new borrower fell from an average of 5.75% in 2008 to 3.63% last year.

Lenders offered some of their cheapest ever deals as the Bank of England cut its base rate to a historic low of 0.5%.

House prices also dropped by more than a tenth over the last four years.