Renters in England could lose out on more than £338,000 in potential financial gains over three decades by not stepping onto the property ladder, according to new research from Mortgage Advice Bureau.
The study suggests that the cumulative cost of renting, combined with missed investment opportunities, could leave tenants significantly worse off over the long term. In some cases, the difference could amount to nearly £31 per day, or £11,272 per year.
The findings are based on a detailed comparison of average rental and mortgage costs over a 30-year period, and highlight the financial advantages of homeownership.
Mortgage Advice Bureau calculated that homeowners could save over £206,000 in housing costs alone. If those savings were invested gradually, they could generate an additional £132,000 in returns, taking the total missed opportunity for renters to £338,170.
In cities such as London and Bristol, the figures are even more stark. Renters in the capital could forgo up to £540,687, while those in Bristol could lose as much as £573,110 – a reflection of the steep gap between average rents and mortgage repayments in those areas. In Manchester, the equivalent figure stands at £428,223.
Ben Thompson, deputy chief executive at Mortgage Advice Bureau, said: “Our research reveals that many renters are much closer to buying than they realise, despite the barriers they perceive.
“Conditions for aspiring first time buyers have improved considerably over the last year or so.”
The report points out that while many renters aspire to buy – with 65% saying they want to own a home – more than a quarter believe they will never be able to afford it. Only 8% cited the flexibility of renting as a preference.
homeownership may now be more achievable than many believe
Despite high house prices and concerns about deposit requirements, the research suggests that for many renters, the perceived barriers may be more psychological than financial. The average homeowner took less than three years to save for a deposit, while renters have typically been renting for over seven years – more than double the average saving period.
In some cases, a deposit was provided by family members, with 12% of homeowners not needing to save at all.
A significant proportion of renters also indicated they would consider buying if mortgage repayments matched their current rent. With affordability conditions improving and lenders now offering products requiring deposits as low as 5%, or in some cases none at all, the research suggests that homeownership may now be more achievable than many believe.
Among younger renters, optimism remains relatively high. Only 7% of those aged 18–24 and 11% of 25–34 year-olds believe they will never own a home. However, the outlook becomes increasingly pessimistic with age, with more than half of renters over 55 saying they expect to rent for life.
Mortgage Advice Bureau also pointed to a broader shift in mortgage lending, with affordability tests relaxing and borrowing potential increasing. A buyer who qualified for a £200,000 mortgage several months ago might now be able to access £240,000, due to changes in interest rates and lending criteria.
“Homeownership builds equity, offers stability, and creates a foundation for future wealth”
Thompson added: “Acting now can lead to many thousands of pounds in long-term savings and investment growth. Homeownership builds equity, offers stability, and creates a foundation for future wealth.
“We strongly encourage renters to speak to one of our advisers to explore their options and take the first step toward owning a home – and their financial future.”
The research highlights a changing landscape for would-be buyers, with products such as Shared Ownership and Joint Borrower Sole Proprietor mortgages designed to address affordability issues. However, the report also underscores a lack of awareness among renters, with 17% citing a limited understanding of the homebuying process as a barrier.
Despite rising rents and ongoing concerns about inflation and wages, Mortgage Advice Bureau believes now could be the right time for many to reconsider their long-term housing plans. As Thompson concluded, “With the right information, guidance, and support, the dream of homeownership is achievable – along with the significant financial opportunities that come with it.”
