The latest UK housing survey shows that private renters spend one-third of their wages on housing, one-third of them struggle to pay for those costs, while only more than half raise their savings.
Renters are most likely to report difficulty at 32% of housing costs, compared with 19% of mortgagors.
However, owner occupiers are most likely to save at 79%, while tenants account for 52%.
The most common savings amount for owner occupants is £50,000 or more, with 33% of the groups reporting savings on this amount.
By comparison, 32% of private renters usually save £5,000 to £15,999.
However, private renters have strong ambitions to own a home, with 2.6 million of them saying they hope to buy a home in the future, while social tenants are less than one million.
“Young private and social renters are more likely to buy than older people and higher income tenants, lonely male families and tenants with raising children,” the study said.
Quilter Financial Planner Thomas Lambert added the survey: “It proves how many private renters are in a state of constant change.
“Private renters not only use the highest proportion of their income to housing, but are more than one-third away from it and are most likely to work hard to cover housing costs, with only half of the money behind them.
“Those who struggle to pay rent rose from 27% in 2019-2020 to 32% in 2023-24, which is a sharp rise in rental costs seen in the cost of living crisis and turbulence in the mortgage market.”
However, the report highlights the strong pipeline for first-time buyers.
The total number of FTBs increased from 617,000 households in 2013-14 to 827,000 in 2019-20, an increase of 975,000 in 2023-24.
Most FTBs are between 25 and 34 years old, 60%, while 21% are between 35 and 44 years old.
The study noted that 15% of FTBs purchased a property in London compared to 2013-14, when 25% of the group bought homes in the capital.
Quilter’s Lambert added: “Today’s report reveals how many people want to take the first step they are heading to the property ladder but face high housing costs and are unable to save afterwards.
“Affordability remains a basic limitation, high home prices, high monthly repayments and the need to build appropriate deposits while maintaining current housing commitments.
“The change in stamp duty has further exacerbated this problem, and the FTB is now facing greater obstacles.”
