First-time buyers spend an average of £163,047 on rent before buying, study finds

First-time buyers in Britain now spend an average of £163,047 on rent before purchasing a home, according to fresh research from Perenna, a specialist mortgage lender. The figure marks a roughly 40% increase from a decade ago and about £46,621 more than in 2015, the analysis shows. House prices rose to about £270,000 in July, according to the Office for National Statistics, underscoring the affordability squeeze facing would-be buyers.

The amount spent on rent today is enough to form a 60% deposit on the average home, according to Perenna. By contrast, a 10% deposit on that same £270,000 property would require about £27,000. The buying landscape is further constrained by mortgage affordability rules that cap borrowing at about 4.5 times salary; some lenders, however, are relaxing these rules in response to regulatory changes announced by Chancellor Rachel Reeves.

First-time renters have spent 12.8 years on average renting before purchasing, up from 11.4 years a decade ago, assuming they begin renting at age 21. Colin Bell, founder of Perenna, said there is a time and place for renting, but warned that the current market can trap young people in a long-running cycle of rising costs. He noted that renting yields no equity and does not help build credit, unlike mortgage payments, and added that with ongoing price increases, the market is not providing the right mechanisms to lift buyers onto the ladder.

Official data published today show rents rose by 5.7% in the year to August, with the average monthly rent at £1,348. Wales recorded the largest regional increase, up 7.8% to £811, while England posted an average rent of £1,403. Scotland rose 3.5% to £1,002. London remains the most expensive region, at £2,253 per month, while the North East has the lowest average at £745. Ben Twomey, chief executive of tenant campaign group Generation Rent, said that rents have risen faster than wages and called for protections to curb rent increases and to devolve powers to mayors to act locally.

Officials say more lenders are expanding access to low-deposit products. Newcastle Building Society announced a 2% deposit deal last week, though such mortgages typically carry higher interest rates and eligibility restrictions. The findings illustrate a persistent tension in the housing market between rising rents and the goal of enabling first-time buyers to save for a deposit.