While landlords continue to benefit from robust rental demand and rising yields, new figures reveal an increasingly bleak picture for renters hoping to step onto the property ladder.
According to Barclays’ latest Property Insights report, just 17% of UK renters were saving for a house deposit in July—down sharply from 31% at the start of the year, and the lowest figure in six months. The decline comes amid a surge in rental and utility costs, coupled with falling household confidence and stagnating wages.
Consumer spending on rent and mortgages rose 5.2% year-on-year last month, marking the steepest increase since February. Utility bills climbed a further 2.7%, compounding the financial pressure faced by renters.
Squeezed Budgets, Shrinking Hope
The report found that 62% of renters have recently seen their rent increase—or expect it to rise imminently. With housing costs now consuming nearly a third (30.8%) of the average renter’s take-home pay, saving for a deposit has become an increasingly distant goal.
“Many people dream of owning a home, but our latest findings show just how difficult it’s becoming for renters to save while managing rising living costs,” said Jatin Patel, Head of Mortgages at Barclays.
By contrast, homeowners spend a smaller share of their income—26.6%—on mortgage payments, despite earning on average £14,000 more annually than renters.
Confidence Collapses
Barclays also reported a slump in housing market confidence. Just 26% of UK adults expressed confidence in the market during July, while only 12% of renters believe they could buy within the next year. Perhaps more tellingly, 28% say they’re no longer interested in homeownership at all—the highest level recorded this year.
Lettings agents are seeing the effects first hand.
“Tenants who were saving to buy five years ago are now renewing their leases over and over,” said Tom Ingram, a Nottingham-based agent. “It’s not that they’ve given up the dream—they’ve just lost faith in the system.”
Boom for Landlords, but for How Long?
Landlords may be enjoying a period of sustained demand, but the long-term picture is more complex. As fewer renters make the leap to homeownership, the pipeline of first-time buyers is thinning—raising questions about the future balance of the housing market.
With an election looming, housing reform is once again moving up the political agenda. Critics warn that ongoing “rentflation”—despite landlords facing their own rising costs—could trigger calls for greater regulation.
Meanwhile, 55% of UK adults believe renting is more expensive than owning, rising to 61% among current homeowners. Yet among renters themselves, just 42% agree—likely a reflection of lower incomes and limited access to affordable mortgages.
‘The Numbers Don’t Add Up’
The mismatch between perception and reality is reflected in buyer behaviour. While 45% of prospective homeowners prefer to wait and save a larger deposit, only 12% would consider borrowing more to get on the ladder sooner. A third say they would downsize if it meant lower mortgage payments.
Barclays is promoting solutions such as its Mortgage Boost and Family Springboard schemes to help renters overcome the deposit hurdle. But even these creative approaches may fall short if economic uncertainty continues to weigh on consumer sentiment.
Will Hobbs, Managing Director at Barclays Private Bank, offered a cautious outlook: “The UK economy is in better shape than many believe. But turning that into renewed spending—and saving—depends on confidence. And right now, that’s in short supply.”
Renting as the New Normal?
As rent inflation chips away at disposable incomes and homeownership dreams, the rental market looks set to remain buoyant—at least for now. But whether this represents a permanent shift away from buying, or merely a pause before recovery, remains to be seen.
For many renters, the conclusion is becoming hard to ignore: the numbers simply no longer add up.