For many people, renting is an important first step towards home independence, offering benefits like flexibility and the ability to test different areas and types of homes before you commit to buy somewhere. However, is the price of renting preventing you from getting your foot onto the property ladder and saving those all-important pennies for a deposit? Fear not, you are not alone!
Recent research we commissioned, that looked at home buyers and renters across the country, revealed that the average British adult will shell out more than £63,000 in rent before being able to get onto the property ladder – and those who have bought their first home within the last five years typically paid £625 every month in rent to their landlords.
On average, it takes renters almost eight-and-a-half years before they finally save up enough to buy their own home, spending a total of £63,225 in rent, which is the equivalent of more than a quarter of the average £228,903 property in the UK. No wonder that over half of the people surveyed said they felt as if the dream of home ownership will never be possible!
However, home ownership can cost less than your rent. For example, with our average selling price of £156,000, the standard monthly mortgage repayments would make you approximately £100 a month better off than paying the typical £625 rent.
In the study of 2,000 adults who bought their first home in the last five years, or who were still renting, there were many ways people tried to save for their deposit.
Four in 10 were able to lean on their parents for financial support when it came to their deposit, while a fifth relied on inheritance. A quarter even ended up moving back in with their parents to save on rent - and another 24 per cent considered it but were able to avoid it.
For those respondents still renting, they believed it would be at least another four years before they would be in a position to think about buying their own home - with over 18% taking on two jobs in a bid to save for a deposit while paying out monthly to a landlord, 30% taking a packed lunch to work and 18% doing all their shopping in the reduced section of the supermarket. One in four have also forsaken holidays and a third have cut back on luxuries like magazines, flowers in the home, and even their Netflix account.
As the UK’s leading home builder for first time buyers, with 70% of our customers falling into this category, we understand the challenge of saving for a deposit and the options that are there to support potential homeowners. From the Government backed Help to Buy scheme - which can help you save for a deposit; to shared ownership programmes that enable you to buy a percentage of your home, there is support available to people looking to get on to the property ladder.
Today’s research has highlighted the importance of these initiatives but also emphasises the challenges of raising awareness about them and that home ownership is not a pipe dream.