According to analysis from Perenna assessing Office for National Statistics figures on housing, private rent and average house prices, the average cost of rent pre-purchase is up from £116,427 in 2015.
The report added that the average first-time buyer spends around 12.8 years paying rent before they get onto the property ladder.
Perenna said that prospective buyers are “spending significantly more time and money renting before purchasing, severely impacting their ability to get onto the housing ladder”.
The report added that the average UK house price is £268,652, and with a 10% deposit, would require £26,865.
Without the heightened expenditure on rent, first-time buyers would have had the opportunity to save such a deposit more easily, the lender said.
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Colin Bell, COO and founder of Perenna, said: “There is a time and a place for renting. While some may make the personal choice to rent in the long term, others are forced into a seemingly never-ending cycle of rising costs. The current infrastructure of the property market means we’re encouraging our young people to get trapped into long-term renting over purchasing a home.
“Renting is ultimately money spent without return. Unlike mortgage payments, which include a capital element (savings) and build equity, rent offers no stake in the property and often doesn’t even strengthen someone’s credit profile — despite renters frequently paying more each month than they would with a mortgage.”
He continued: “With house prices increasing overall, they could have spent their hard-earned money on an appreciating asset, but the market is failing to provide the right financial mechanisms to help lift buyers onto the ladder.
“Let’s stop obsessing over interest rates, which have little bearing on whether people can own a home. Instead, we should get building, roll out more low-deposit solutions, evolve the regulations to favour mortgage innovation, and get homes into the hands of our young people.
“We need to act now, with the support of regulators, the government and the wider private market, to roll out the solutions necessary to ensure we’re not in the same position in 2035.”