More than half of first-time buyers moving from rented accommodation into homeownership are taking on higher monthly housing costs, according to research from Hamptons.

Analysis of Connells Group data found that 56% of former tenants who bought their first home in September 2026 had a monthly mortgage payment exceeding their previous rent. This was the highest proportion recorded in at least a decade and compares with 33% in September 2022.

The findings illustrate how higher mortgage rates have altered the financial considerations facing prospective homeowners. During the period of historically low interest rates, buying typically reduced monthly housing costs, although accumulating a sufficient deposit remained a significant obstacle.

In September, the average monthly mortgage payment for a first-time buyer leaving the rental sector reached £1,227. Hamptons calculated that mortgage payments were, on average, 8.6% higher than the rent buyers had previously paid, equivalent to an additional £39 a month.

For every £1 previously spent on rent, these buyers are now paying £1.09 towards their mortgage. In September 2022, the equivalent figure was 90p.

The change has been relatively recent. As recently as July, fewer than half of first-time buyers moving out of rented accommodation were taking on higher monthly payments, with the proportion standing at 47%.

DEPOSIT SIZE INFLUENCES MONTHLY COSTS

Hamptons found a substantial difference in deposit sizes between buyers whose monthly housing costs increased and those who achieved a saving.

First-time buyers taking on mortgage payments above their previous rent purchased with an average loan-to-value (LTV) ratio of 91%, representing a 9% deposit.

Those whose mortgage payments were below their former rent had an average LTV of 83%, equivalent to a 17% deposit.

Age also influenced the outcome, with older first-time buyers more likely to experience an increase in monthly expenditure.

Among buyers in their 40s, 67% took on mortgage payments higher than their previous rent. Their monthly mortgage costs were, on average, 18.2% above their former rental payments.

For buyers in their 30s, 58% faced higher payments, with the average increase standing at 6.9%.

By contrast, 47% of buyers in their 20s paid more after purchasing, while average mortgage payments for this age group were 7.5% below their previous rent.

Hamptons attributed some of the difference to older purchasers buying larger properties and choosing shorter mortgage terms.

Buyers in their 40s took out mortgages with an average term of 27 years, compared with 31 years for those in their 30s and 34 years for buyers in their 20s.

RENTAL GROWTH ACCELERATES

The research also identified a further increase in rental inflation, with annual growth in newly agreed rents accelerating for the tenth consecutive month.

Across Great Britain, the average rent on a newly let property rose by 2.7% in the year to September, the fastest annual increase since November 2024.

The average monthly rent reached £1,433, compared with £1,396 a year earlier.

Unlike the sharp increases following the pandemic, which were concentrated in the Midlands and northern England, the latest acceleration has been more evenly distributed across regional markets.

The South East recorded annual growth of 4.6%, taking average newly agreed rents to £1,544, while rents in the South West increased by 4.1% to £1,353.

Both regions recorded annual growth above 4% for the first time since September 2024.

Greater London experienced a more modest increase of 1.5%, although its average newly agreed monthly rent remained considerably higher at £2,357.

For existing tenants whose rents increased, the average rise was 5.6%, unchanged from August but above the 5.3% recorded in September 2025. Scotland recorded the largest average increase for tenants experiencing a rent change, at 6.9%.

However, rental inflation across the entire occupied rental stock continued to moderate. Average rents for all tenants, including those who had not moved, increased by 1.9% over the year, down from 3.9% in the preceding 12-month period.

Hamptons suggested that the growing difference between new-let and existing-tenancy rental inflation was unlikely to continue indefinitely.

HIGHER RATES CHANGE THE BUYING EQUATION

Aneisha Beveridge, head of research at Hamptons, said: “When interest rates were low, the financial case for tenants to buy as soon as they could was fairly straightforward. Saving a deposit was difficult, but buying usually brought an immediate fall in monthly housing costs, alongside the chance to fix those costs for longer.

“Higher mortgage rates have turned that equation on its head.”

She added: “Today, more than half of renters who buy are taking on a higher monthly payment than the rent they have left behind.

“The long-term benefits of home ownership – building equity, greater security and eventually owning a home outright – remain, but the immediate monthly saving that once rewarded tenants for making the leap has largely disappeared.”

Turning to the rental market, Beveridge said: “Meanwhile, rental growth on newly let homes continues to gather pace, with the acceleration now spread fairly evenly across markets outside the capital. So far this year, higher rents have mainly been felt by tenants moving home.

“But if growth continues to pick up, it is likely to feed through to more existing tenants in the coming months as the gap between new and existing rents widens.”