Breaking the rent barrier – Lownds

According to the Office for National Statistics (ONS), average private rents rose by 7.4% UK-wide in the year to April 2025, outpacing house price inflation in nearly all regions. This widening gap is more than a statistical concern; it’s a lived reality for millions who increasingly question whether they’ll ever own a home.

SpareRoom’s survey of over 6,500 renters paints a sobering picture. A quarter now spend over 50% of their income on rent, and 70% say “having somewhere to call home” is their core motivation to buy. Yet, 65% of aspiring first-time buyers cannot save for a deposit, and 67% don’t believe their income qualifies them for a mortgage. This confluence of financial pressure and emotional strain makes it clear that we, as an industry, must do more to support a rental population left behind by affordability barriers and outdated lending norms.

While government support schemes have helped pockets of the market, many have rigid criteria or limited scope. Lenders must therefore lead the charge on designing flexible, accessible and responsible products for would-be buyers who, despite ongoing financial challenges, demonstrate strong rental track records and responsible financial behaviour.

Take the recent launch of our 100% LTV Rent to Own mortgage as a case in point. Available to those living within the ST postcode area, this product provides a deposit-free route to homeownership by allowing monthly mortgage payments that mirror current rent levels. While regionally focused, it demonstrates how building societies and other mutuals can apply their values – personalised underwriting, local knowledge, and a people-first approach – to deliver tailored support to renters who may otherwise feel locked out of the market.

However, products like Rent to Own are not a panacea. They should complement, not replace, a broader ecosystem of support schemes and affordable housing solutions to help remove homeownership barriers for motivated yet constrained borrowers.

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Finding the balance

Renters, especially younger and lower-income groups, are bearing the brunt of economic headwinds, and without decisive intervention, we risk entrenching generational inequality. The onus is on lenders, brokers, trade bodies, developers and the regulator to respond meaningfully. That means innovating with purpose, lending with care, and keeping our focus fixed not only on risk metrics, but on human outcomes.

Government intervention also remains pivotal. Whether through refreshed Help to Buy-style initiatives, tax incentives for first-time buyers, or reforms that allow greater flexibility in affordability assessments – such as recognising rent as proof of mortgage readiness – we need cross-sector collaboration to close the gap between aspiration and achievement.

For many years, the mortgage industry has shown a capacity for responsiveness and creativity and it’s imperative that we continue investing our energies into delivering long-term, sustainable pathways to homeownership. We firmly believe that innovation must be grounded in responsibility. Whether through deposit-free products or common-sense underwriting, our mission is to expand access to homeownership while preserving the integrity of the lending process.

As important as launching new products is demystifying existing ones. Shared ownership, for instance, still suffers from consumer confusion despite being a viable solution for many. Intermediaries have a crucial role here in explaining options and aligning solutions with clients’ unique circumstances. And this applies to other niche products, which can incorporate some element of intergenerational lending.

It’s all about finding the balance between opportunity and prudence, and in ensuring that today’s renters can find the confidence, support, and sense of hope to become tomorrow’s homeowners.