Number of renters saving for a deposit hits six-month low
Rent and mortgage payments in the UK rose by 5.2% year-on-year in July, while utility spending increased by 2.7%, according to recent figures from Barclays Property Insights.
The data indicates that renters are experiencing a sharper reduction in disposable income compared to homeowners, contributing to declining confidence in both their prospects of entering the property market and the overall housing sector.
The proportion of renters saving for a deposit dropped to 17% in July, down from 31% in January, marking a six-month low. House prices have now surpassed deposit size as the main obstacle to homeownership, cited by 38% of respondents compared to 35% who pointed to deposit costs.
Barclays also found that 62% of renters have seen or expect to see rent increases this year, further limiting their ability to save. Only 12% of renters believe they could purchase a home within the next year, with this figure rising slightly to 16% for those looking ahead five years. In June, this five-year outlook stood at 19%.
Affordability remains a major concern, with 37% of renters saying they cannot afford to buy in their current or preferred area. Additionally, 28% reported a lack of interest in homeownership, the highest level recorded this year. The share of renters actively saving for a deposit is at its lowest point in 2025, with common strategies including reducing non-essential spending (14%), cutting back on holidays (11%), and seeking additional income through side jobs (8%).
Interest rate cuts earlier this year have led 55% of all consumers to view renting as more expensive than paying a mortgage. This perception is more common among homeowners (61%) than renters (42%). Renters spend an average of 30.8% of their take-home pay on housing, compared to 26.6% for homeowners. The average gross income reported by homeowners was £37,775, while renters reported £23,562.
Financial strain is evident, as 26% of renters said they are struggling to meet monthly payments, compared to 15% of homeowners. Nearly half of renters (45%) have changed their spending habits to manage housing costs.
Among those aiming to buy, 45% prefer to save for a larger deposit to reduce future mortgage payments, while 12% are willing to enter the market with a smaller deposit and higher borrowing costs. A third (34%) would consider moving to a smaller property to lower borrowing needs. Some 16% would use all their savings to buy a home, a figure that rises to 20% among millennials.
For mortgage brokers, these trends may slow first-time buyer activity and new business, but also present opportunities to provide valued advice on affordability, deposit strategies, and navigating complex lending options as clients face changing economic conditions.
“Many people dream to one day own a home, but our latest findings highlight how renters are finding it ever harder to save for a deposit while keeping up with rising costs,” said Jatin Patel, head of mortgages, savings and insurance at Barclays. “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.”
Megan Eighteen, president of industry body ARLA Propertymark, meanwhile, highlighted the importance of tackling the root causes of the issues head-on.
“Additional support needs to be provided to first-time buyers in order to help them step onto the housing ladder, and the major concern in the private rented sector, which is causing rent levels to rise, is the ever-widening gap between supply and demand levels,” she said.
“Continued regulatory and financial pressure placed on landlords is pushing some out of the market completely at a time when homes are desperately needed. Investment from reputable and professional landlords is crucial as the private rented sector plays a key role in housing the nation, and this can only be done with the understanding and support of all governments across the UK.”
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