THE MIDLANDS PROPERTY GUIDE M O NE Y WAT CH F I NA NCE
MAT TERS TO HOMEOWNER S AND LANDLORDS Moneywatch Finance
FIRST-TIME BUYERS NOW SPEND £163,000 ON RENT B EFORE BUY ING – WHY THIS
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New figures have revealed that first-time buyers are now paying an eye-watering £163,047 on rent before they are able to purchase their first home. This represents a 40 per cent increase in a decade, according to research from specialist mortgage lender Perenna.
Back in 2015, renters typically spent £116,427 before buying. Today, they are par ting with £46,621 more, as r ising rents and living costs make saving for a deposit harder than ever.
This amount is now equivalent to a 60 per cent
deposi t on the average UK home, highl ighting how much money is being spent without building equity or ownership.
WHY IT MATTERS TO EXISTING HOMEOWNERS AND LANDLORDS
While this may seem like an issue only af fecting
f i r st-time buyer s, it has significant implications for homeowners and landlords too.
l For Homeowners Looking to Sell: Fi r st-time buyer s are the base of the housing chain. When fewer people can af ford to take that f i r st step, it slows demand for entry-level homes, which in turn makes it harder for seller s to move up the ladder. This can lead to slower sales and longer per iods of uncer tainty when transactions.
tr ying to complete proper ty
l For Landlords: Higher rents mean
strong demand for rental
proper ties, which can suppor t yields. However, it can also create political and regulatory pressure for rent controls or str icter tenant protections. Wi th average rents continuing to r ise faster than wages, landlords should keep a close eye on potential government interventions.
HOUSE PRICES AND DEPOSITS
According to the Of f ice for National Statistics, the average UK house price reached £270,000 in July.
l A 10 per cent deposit now requires around £27,000, a target many renters f ind increasingly out of reach due to high rental costs and the elevated cost of living.
l This creates a vicious circle, with tenants struggling to save while paying high rents, fur ther delaying their entry into the housing mark et.
MORTGAGE AFFORDABILITY RULES BEGIN TO EASE
Even for renters who have managed to save, strict
mor tgage af fordability rules are another obstacle. l Most single buyer s are limited to bor rowing 4.5 times their annual salary, which can be insuf f icient to buy in many par ts of the countr y.
Some lenders are now loosening these restr ictions
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