Data from Connells, part of the Skipton Group, found that the average first-time buyer deposit was currently £41,403 for an average first-time buyer property price of £243,883.
Skipton Building Society, which carried out research with 1,000 renters, said that renters just starting to save towards a property purchase with just £100 per month would not have enough for around 35 years, particularly as house prices continue to rise and the goalposts keep moving.
The mutual’s survey found that 73% felt locked out of the property ladder and 45% blamed high rental costs for making it difficult to save.
The research found that 32% of renters spent 40% or more of their salary on rent each month, exceeding the affordability rule of thumb of 30%.
Some 68% of renters said they felt they had put their lives on hold to be able to save for their first property purchase while paying rent. The majority – 94% – said they had had to make sacrifices, with 49% missing out on holidays, 45% socialising less and a fifth delaying other life plans like marriage or kids.
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Some 43% said these sacrifices negatively impacted their mental health.
The research was commissioned by Skipton Building Society to mark the third year since it launched its Track Record mortgage, which offers up to 100% loan to value (LTV) for eligible renters based on their rental payment history.
Some 82% of renters believed that if they can afford their rent, it should be enough to prove affordability for a mortgage.
When asked what would be helpful, 34% of renters said lower deposit requirements and 31% wanted to see genuinely affordable homes being built.
A quarter said lenders should consider their ability to afford a mortgage based on rental payments, and 24% said there was a need for more flexible or accessible mortgage options.
Homeownership is getting more challenging for renters
Jen Lloyd, head of mortgage products and proposition at Skipton Building Society, said getting onto the property ladder was becoming “increasingly challenging” for renters, who were balancing the cost of saving for a deposit and their living costs.
She added: “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.”
Lloyd said buying a property could unlock “much more” than homeownership, as it could give more stability, support long-term wellbeing and give people the confidence to move forward with life plans.
She added: “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.”
