First-time homebuyers in the UK now face significantly higher costs in renting before they can afford to purchase a property, with recent research revealing they spend an average of £163,047 on rent prior to buying. This figure is a substantial 40 per cent increase compared to a decade ago, when the average rent expenditure was £116,427. The rise is primarily driven by soaring rents and the climbing cost of living, which are seriously impeding prospective buyers’ ability to save for a deposit.

According to data from specialist mortgage lender Perenna, the additional amount paid in rent today represents an increase of approximately £46,621 since 2015 alone. When the average house price rose to £270,000 in July, the deposit needed — typically 10 per cent — was around £27,000. However, the sizeable sums paid in rent could be equivalent to a 60 per cent deposit on the average home. Despite this, mounting rental costs combined with affordability restrictions on borrowing limit many from stepping onto the property ladder. For example, mortgage rules often cap borrowing at 4.5 times a buyer's salary, making homeownership particularly difficult for single purchasers.

Perenna's founder, Colin Bell, highlighted the structural challenges young people face in the housing market. He explained that while some choose to rent by preference, many are trapped in an increasingly unaffordable rental cycle without building equity. Unlike mortgage payments—which help buyers acquire ownership and creditworthiness—rent payments offer no investment return, effectively locking tenants out of wealth accumulation despite often exceeding monthly mortgage costs. Bell warned that the current market infrastructure encourages long-term renting rather than homeownership, calling for more financial mechanisms and low-deposit mortgage options to help young people onto the ladder.

The number of years first-time buyers rent before purchasing has increased as well, from an average of 11.4 years a decade ago to 12.8 years today, assuming renters start at 21. This shift reflects deeper affordability issues; official figures show the average private monthly rent rose by 5.7 per cent in the year to August, reaching £1,348 nationally. Regional differences are stark: London sustains the highest rents at £2,253 per month, while the North East has the lowest average at £745. Wales experienced the largest annual increase at 7.8 per cent, and England holds the highest average rent overall at £1,403.

Tenant advocacy groups are pressing the government for intervention. Ben Twomey, chief executive of Generation Rent, expressed concern that rents have risen faster than wages, increasingly burdening tenants. Twomey called for rental protection measures analogous to energy and water bill caps, urging devolved authorities to have powers to limit rent increases regionally.

The trend of escalating rent expenses predates recent years. Research from 2016 by the Association of Residential Letting Agents (Arla) found first-time buyers spent an average of £52,900 on rent before buying. London renters faced the highest costs at £68,300, compared to £31,300 in the North East, illustrating a persistent North-South affordability divide. Earlier data from 2014 indicated homeowners spent around £41,900 in rent on average and often rented for seven years before purchasing. Over time, these figures have grown sharply, underscoring intensifying difficulties for young buyers amid rising rents and house prices.

The implications are clear: many renters are effectively funding landlords for years instead of building equity in property, reflecting systemic barriers in the UK housing market. The combination of high rents, borrowing limits, and savings challenges creates a prolonged hurdle for homeownership, prompting calls for policy reforms to equalise opportunities and financial supports for first-time buyers in regions across the country.

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Source: Noah Wire Services