The number of renters actively saving for a house deposit has plummeted significantly this year, a new survey reveals, as soaring rental costs squeeze household budgets.
Just 17 per cent of renters surveyed in July are currently building a deposit, a sharp decline from 31 per cent recorded at the start of the year, according to research from Barclays Property Insights.
The primary driver behind this struggle is escalating rent, with nearly two-thirds (62 per cent) of those surveyed reporting they have either experienced or anticipate a rent increase this year, directly impacting their ability to save.
This financial pressure is also dampening aspirations for home ownership. Only 12 per cent believe they can achieve it within the next year, rising marginally to 16 per cent over a five-year horizon.
Furthermore, more than a third (37 per cent) find themselves unable to afford a home in their current rental area or desired future location.
Despite these challenges, common strategies for accumulating savings include reducing discretionary spending, cutting back on holidays, or generating additional income through a side hustle, the survey noted.
Around a quarter (26 per cent) of renters said they are struggling to afford their monthly payments, compared with around one in seven (15 per cent) home owners who feel the same way about their mortgage.
Nearly half (45per cent) of renters said they are adjusting their spending habits to ensure they can continue to afford their housing costs.
Many mortgage lenders have recently announced changes to their lending criteria, potentially enabling some people to take out bigger loans.
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Jatin Patel, head of mortgages, savings and insurance at Barclays, said: “Many people dream to one day own a home, but our latest findings highlight how renters are finding it even harder to save for a deposit while keeping up with rising costs.
“More positively though, we’re still seeing savers create strong habits, and consider carefully the balance between getting into the market quickly with a lower deposit or trying to minimise monthly repayments in the longer term.”
Barclays commissioned Opinium Research to carry out a survey of 2,000 people across the UK in July.
