With many unable to afford to buy right now, one in five (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.
But according to West Brom Building Society research, 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 a quarter cited high mortgages rates as a factor (25%).
With financial pressures making homeownership more challenging, many tenants are staying in the rental market far longer than expected.
One in seven were found to have 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 rent1 and around one in seven shelling out up to 40 to 50% of income on rent each month2 – it isn’t a surprise saving up for a deposit is challenging.
Despite these challenges, the survey found that nearly half of respondents (48%) 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 straight forward 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.
Alex Windle, Chief Customer Officer at West Brom Building Society, said: “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. But it’s encouraging to see so many renters determined to take that step towards buying a home.
“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.”
Top tips for renters getting ready to buy their first home:
- 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.
- Reduce unnecessary spending – Cut back on non-essential purchases like takeaways, subscriptions, memberships, non-essential clothing or impulse buys.
- 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.
- Look into government schemes – Explore Shared Ownership, or other initiatives that might make buying more affordable.
- Consider alternative living arrangements – Some renters save faster by downsizing, moving in with family or finding a lower-cost rental.
- 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.
- Do your research on first time buyer options – Everyone’s circumstances are unique. Reach out and talk to us about your situation, look at our online guide for first time buyers.
West Brom Building Society’s Goodbye Rent campaign is aimed at helping first time buyers explore their path to homeownership, highlighting its range of mortgage options, including low deposit, shared ownership and new build deals.
For more information visit West Brom Building Society’s Goodbye Rent campaign or speak to one of our advisers on 0800 298 0008 (open week days from 8.30 – 6pm and Saturdays from 8.30 – 12.30pm).
Footnotes
1 - 19% of those surveyed spend 30-40% of their income on rent
2 - 14% of those surveyed spend 40-50% of their income on rent