"It’s no surprise that high property prices, rising living costs and the changes in stamp duty, are making it difficult for people to save for a deposit"
- Alex Windle - West Brom Building Society
Renters in the private sector say that buying their own home is about one thing - breaking free from the rental cycle, despite high costs keeping many trapped (44%).
With many unable to afford to buy right now, 20% say they’re feeling frustrated by their situation, while others say they’re feeling financially vulnerable renting long term (18%), particularly with rising rental costs.
However, according to new research from West Brom Building Society, the desire to own a home remains strong, with renters citing multiple reasons as to why they want to get out of the rental trap. This includes gaining a more secure financial future (46%), improving quality of life (44%) and giving their family more stability (42%).
The research, which surveyed over 2,000 private renters from across the UK, found that many renters face a variety of challenges when it comes to buying their first home.
Over half of respondents felt their biggest barrier to home ownership was high house prices (52%). Other reasons include rising living costs making it hard to save for a deposit (40%), while 25% cited high mortgage rates as a factor.
With financial pressures making homeownership more challenging, many tenants are staying in the rental market far longer than expected.
One in seven had rented for two decades (14%), and a tenth had been renting between 16 and 20 years. The survey also highlighted that renting isn’t just for the young, as over a fifth of private renters (22%) are over the age of 55.
In terms of renting and saving up to buy a home, the findings were clear: affordability remains a major challenge across the board.
With a fifth of renters spending 30 to 40% of their monthly salary on rent and around one in seven shelling out up to 40 to 50% of their income on rent each month, it isn’t a surprise that saving up for a deposit is challenging.
Despite these challenges, the survey found that 48% of respondents had at some point tried to save for a home deposit, but this figure dropped significantly when asked if they were currently saving for a deposit (28%). Others cited financial goals, such as paying off debts or saving for a wedding having taken priority (34%).
And it wasn’t straightforward for those who had started saving, as over one in three (38%) admitted to dipping into the pot to cover living costs, or to make a necessary large purchase, such as buying a car or paying for a holiday.
West Brom Building Society's Top tips for renters getting ready to buy their first home
1: Set a clear savings goal – Work out how much you need for a deposit and set a monthly savings target. At the West Brom, we offer a range of savings accounts, for example, our Fixed Rate Regular Saver offers a 6% yearly interest rate.
2: Reduce unnecessary spending – Cut back on non-essential purchases like takeaways, subscriptions, memberships, non-essential clothing, or impulse buys.
3: Check your credit score – A good credit score can improve your mortgage options. Regularly check and improve it by paying bills on time and keeping credit usage low.
4: Look into government schemes – Explore Shared Ownership, or other initiatives that might make buying more affordable.
5: Consider alternative living arrangements – Some renters save faster by downsizing, moving in with family or finding a lower-cost rental.
6: Speak to a mortgage adviser early – Getting professional advice can help you understand your options before applying for a mortgage. Check out our online mortgage calculator.
7: Do your research on first-time buyer options – Everyone’s circumstances are unique. Reach out and talk to us about your situation, and look at our online guide for first-time buyers.
“These findings paint a clear picture of the challenges renters are facing. It’s no surprise that high property prices, rising living costs and the changes in stamp duty, are making it difficult for people to save for a deposit," explained the society's chief customer officer, Alex Windle, "But it’s encouraging to see so many renters determined to take that step towards buying a home.
Alex added, “We’re committed to helping renters make home ownership a reality. That’s why we consider every customer and their individual circumstances and offer a range of mortgages to support first-time buyers such as lower deposit options, shared ownership and new build deals.”
