According to the latest Barclays Property Insights report, only 17% of renters reported savings in July, while 31% in January.
As costs rise, renters find that their disposable income is squeezed disproportionately compared to their homeowner peers, losing confidence that both can enter the real estate ladder and is more common in the real estate market.
The report said: “Consumers” are particularly prominent among renters, as the amount of deposit savings reached a six-month low. House prices also removed the highest barrier to home ownership (38% vs 35%).
Nearly two-thirds of tenants (62%) have seen or expected to see their rent increases this year, squeezing their ability to save money. Due to cost pressure, only a small percentage (12%) believe that owning home ownership within next year will increase slightly to 16%, who thinks that this will be possible within five years (19% on June).
Costs have also sparked enthusiasm for home ownership, with three-thirds of tenants (28%) reporting disinterest in home ownership, the highest figure so far this year.
To make their first home as affordable as possible, almost half of the people who want to buy (45%) would rather save as much saving as possible to reduce future mortgages.
Instead, only 12% of people will consider entering the property ladder with smaller deposits and face higher borrowing costs.
Commenting on the data head of Barclays mortgage loans, Jatin Patel said: “Many people dream of owning a home one day, but our latest findings highlight how renters can struggle to save money while keeping costs going.”
He added: “More positive though, we are still seeing savers develop a big habit and carefully considering the balance between getting to market quickly with lower deposits or trying to get monthly repayments in the long run.”
Megan, president of Arla Propertymark, commented: “In some parts of the country, rent levels have reached unsustainable levels and many tenants will find that their financial situation is indeed pushed to the limit.”
Beyond that, the eighteen highlighted that the average deposit for buying a home is about £70,000, so for some, paying high rents and savings on deposits.
“It is very important that we address the root causes of these issues. To help them get on the housing ladder, additional support is needed to be provided to first-time home buyers, and the main focus of the private rental sector (which leads to rising rental levels) is the growing gap between supply and demand levels.”
