It’s not a well kept secret that Brit’s are shelling out a fortune on rent before finally hoping on the property ladder. But you will be shocked by how much the average person is actually spending on rent before finally saving for a home and getting on the property ladder.
New research from UK homebuilder Keepmoat Homes has revealed that Brits shell out an average of £63,000 in rent before they make the leap onto the property ladder. Most people now rent for almost eight-and-a-half years before they finally get onto the property ladder, shelling out £625 every month in rent to their landlords.
That brings spending to a total of £63,225 during that time. With that amount of money most people could have already paid for a quarter of a £229,000 property in the UK.
The study of 2,000 adults who have bought their first home in the last five years, or who are still renting, found three quarters believe it is ‘impossible’ to save for a home while renting.
Cost of renting
‘For many people, renting is an important first step towards home independence,’ says Tim Beale, chief executive officer for Keepmoat Homes. ‘It offers benefits like flexibility, allowing you to test different areas and types of home, before you commit to buying.’
‘However, this research highlights the considerable cost of renting. It therefore isn’t surprising to see that for over half of people asked, they feel as if the dream of home ownership will never be possible. In reality home ownership can cost less than your rent.’
‘For example with our average selling price of £156,000, the standard monthly mortgage repayments would make you approximately £100 a month better off than paying the typical £625 rent,’ he adds.
However, gathering the initial deposit for a home isn’t easy. Of those who have bought a property, they spent almost five years saving before putting down an average deposit of £24,033 on their property – more than 80 per cent of the average adult’s salary.
Saving for a home
Four in 10 were found to be able to lean on their parents for financial support for deposits, while a fifth relied on inheritance. A quarter even ended up moving back in with their parents to save on rent.
For respondents still renting, they think it will be at least another four years before they are in a position to think about buying their own home.
Researchers also found 18 per cent of renters have taken on two jobs when saving for a home, while paying out monthly to a landlord. One in four have forsaken holidays. While a third have cut back on luxuries like magazines, flowers in the home – and even Netflix accounts.
To help put the pennies away for their precious house deposit, 30 per cent also started taking a packed lunch to work. While 18 per cent tried to do all of their shopping in the reduced section in supermarkets, rather than paying full price.
Unsurprisingly, three quarters of those polled believe something needs to be done by the government when it comes to the cost of renting. In a bid to help those trying to save for their own home.
‘As the UK’s leading homebuilder for first time buyers, with 70 per cent of our customers falling into this category, we understand the challenge of saving for a deposit. Also the options that are there to support potential home owners,’ adds Tim Beale of Keepmoat Homes.
‘From the government-backed Help to Buy scheme – which can help you save for a deposit; to shared ownership programmes that enable you to buy a percentage of your home, there is support available to people looking to get on to the property ladder.’
So while it might be easier to dismiss owning a home as a far off pipe-dream, you could be saving a fortune by looking into ways to make that dream come true – and quicker.