A third of aspiring homeowners are saving £100 a month or less, leaving many facing decades of saving to reach the average first-time buyer deposit, according to new research from Skipton Building Society.
The study of 1,000 renters who hope to buy a home found that 73% feel locked out of the property ladder, while 45% said high rental costs are making it difficult to save for a deposit.
Data from Connells, part of the Skipton Group, shows the average first-time buyer deposit currently stands at £41,403, with the average purchase price at £243,883. Based on current savings patterns, many renters could take decades to accumulate a deposit of that size, particularly if house prices continue to rise.
The findings highlight the pressure facing renters, with 32% spending between 40% and 60% or more of their salary on rent each month, significantly above the commonly cited affordability benchmark of 30%.
As a result, more than two-thirds (68%) said they feel they are putting their lives on hold while trying to save for a first property and continue paying rent. Almost all respondents (94%) said they had made sacrifices in pursuit of homeownership, with 49% cutting back on holidays and 45% reducing spending on socialising. One in five said they had delayed major life decisions such as getting married or having children.
The financial strain is also affecting wellbeing. Two in five respondents (43%) said the sacrifices required to save for a home had negatively affected their mental health.
The research was commissioned to coincide with the third anniversary of Skipton Building Society’s Track Record mortgage, which offers eligible renters with a strong payment history the opportunity to borrow up to 100% loan-to-value.
To mark the anniversary, the mutual hosted a “Locked Out” pop-up event designed to highlight the barriers facing renters seeking homeownership. The event featured a symbolic locked door and was hosted by Harry Clark, winner of television programme The Traitors, who is currently saving for his first home.
Clark said: “People often assume that if you win a show like The Traitors, you’ll go straight out and buy a house – but it’s not always that simple.
“I was 22 when I won, and at the time I had other priorities. I also made the decision to step away from my full-time job and am now self-employed, exploring new opportunities while supporting my family and making the most of everything that came from the show.
“More recently, I’ve moved back in with my parents to help me save, and I’ve realised first-hand just how tough it can be to get onto the property ladder – even when you’re doing all the right things.
“Speaking to renters at the event, it was clear so many people are facing the same challenges. It’s not always about being able to afford a mortgage, it’s about overcoming that initial barrier of a deposit. That’s why it’s so important that we’re seeing more innovative solutions like the Track Record mortgage to help people get started.
“Hopefully this campaign helps people see that there are different routes onto the property ladder, and that owning a home could be more achievable than they might think. I certainly learned a lot on the day and came away with options I’ll be exploring myself.”
The survey also found that 82% of renters believe that being able to afford rental payments should be sufficient evidence that they can manage mortgage repayments.
However, many continue to struggle with the challenge of building a deposit. Some 35% said they feel stressed about money all the time, while the same proportion described the process of saving for a home as long and exhausting. A further 30% said they are anxious about their future.
Despite these challenges, 32% said they believe the effort will ultimately be worthwhile. When asked what would help them most, 34% pointed to lower deposit requirements, while 31% said more genuinely affordable homes need to be built.
A quarter said lenders should place greater emphasis on their ability to afford mortgage payments based on their rental history, while 24% called for more flexible and accessible mortgage products.
Jen Lloyd, head of mortgage products and proposition at Skipton Building Society, said: “Getting onto the property ladder is becoming increasingly challenging for renters, as they try to balance the cost of living with saving for a deposit and all the other associated costs that come with buying your first home.
“The figures in our latest research are a stark reminder of the pressures many are facing, often despite already demonstrating they can afford significant monthly housing costs.
“In many cases, renters are already meeting payments comparable to a mortgage, but the barrier of saving a deposit continues to hold them back. We believe it’s only fair that people who have demonstrated they can afford regular rental payments have a real opportunity to become homeowners, even if high rental costs have made it difficult for them to save for a deposit.
“But buying a property can unlock much more than homeownership – it can provide greater stability, support long-term wellbeing, and give people the confidence to move forward with major life plans.
“This year also marks three years since the launch our Track Record mortgage, which was created to provide an innovative solution for renters who may feel trapped in the rental cycle.
“Since launch, it has helped more than a thousand renters take their first step onto the property ladder, with many buying a home without any deposit at all. In fact, more than half are now paying less on their mortgage each month than they previously did in rent.”
