As the cost of private renting goes up, now could be a good time to make the transition to home ownership. Here’s what you need to know…
If you currently rent a property in the UK, it’s probably no surprise to hear that private renting is getting more expensive. According to the latest data from the Office for National Statistics (ONS), average UK private rents increased by 9.1% in the 12 months to November 2024 – up from 8.7% in the 12 months to October 2024.
Breaking this figure down, average rents increased to £1362 (9.3%) in England, £772 (8%) in Wales and £980 (6.5%) in Scotland, while in Northern Ireland, average rents increased by 9% in the 12 months to September 2024.
In England, rent inflation was highest in London (11.6%), while Yorkshire and The Humber saw the lowest increase (5.7%) in the 12 months to November 2024.
‘The rental market remains under intense pressure, with demand significantly outpacing supply,’ says Alex Upton, Hampshire Trust Bank’s managing director. ‘Recent figures from Pegasus Insights show that eight in ten landlords reported strong tenant demand in quarter three, and Propertymark’s data highlights an average of nine prospective tenants competing for each available property. Without a notable increase in supply – and that doesn’t appear imminent – this imbalance will continue driving rents higher. I fully expect to see new rental records set in 2025.’
Making the switch to home ownership
If you’re currently renting, but are worried about potential rent hikes, where does that leave you? One possible consideration might be to start thinking about home ownership and whether that’s an option for you.
While home ownership does involve a longer-term commitment and higher upfront costs (including paying a deposit, which, for many, is the biggest hurdle), if you can afford to, owning a home can offer you greater financial independence as you’re no longer lining your landlord’s pockets. Instead, you’re building equity in your home. It also offers increased security and peace of mind. However, it’s a big decision and, as well as your deposit, other affordability considerations include monthly mortgage repayments, as well as insurance and maintenance costs.
Top tips for preparing to buy your first home
If you feel like this is the year to stop renting and put down roots by buying a home of your own, here are our top tips to help you get ready…
Save, save, save!
Getting a deposit together is arguably the biggest hurdle to home ownership, so start saving as soon as possible. While getting enough money together for a deposit can sometimes seem insurmountable, saving even just a little regularly, is a great start.
Consider location and property
Decide where you want to live, considering transport links, local amenities, schools and entertainment.
Figure out what you can afford
While you might be hankering after a rambling countryside cottage, smart Georgian townhouse or flash penthouse apartment, it’s important to approach house buying with a healthy dose of realism. Working out what you can afford is very important and a good mortgage broker can advise you of what’s feasible. It’s essential to ensure you don’t stretch yourself to the limit of what you can afford.
Seek advice from an experienced mortgage broker
Probably the most crucial advice we can offer is to seek support from an experienced mortgage broker. As experts in the field, we’ll be able to guide you through the process of buying your first home, from figuring out what you can afford to getting an Agreement in Principle to applying for the right mortgage for you. If you’re ready to take the first step in this exciting journey, we’re here to help.