What rising rental costs mean if you’re a tenant – and why a mortgage might not be as far from your reach as you think.

According to the latest Goodlord Rental Index, UK rents have risen by 4.9% over the past 12 months, taking the average monthly rent up from £1,507 a year ago to £1,581 today. For tenants, this equates to an average annual increase of £888.

However, this national average masks regional variations, and some differences are significant. For example, the North East recorded the largest annual increase, jumping 13.9%, from £878 to £1,000 per month for tenants. Wales also saw a significant rise of 7.4%, taking average rent up to £994 per month, while Greater London and the South East experienced more modest increases, of 4.4% and 3.1% respectively. The East of England was the only area to see a slight annual decline, with average rents down 0.4%.

‘Overall, rental averages continue to outstrip inflation year-on-year, highlighting the ongoing supply and demand pressures,’ says Goodlord chief executive, William Reeve.

Swapping renting for a home of your own

Rising rental costs can be worrying, putting you under increasing financial pressure. Les Pick, MB Associates’ Sales & Operations Director, says: ‘Rising rents are placing increasing pressure on households across the UK, and for many tenants, the prospect of saving for a deposit while paying ever-higher monthly rents can feel almost impossible.

Adds Les: ‘It’s frustrating that many tenants are already paying more in rent than they might pay on a mortgage, yet they assume homeownership is beyond their reach. The good news is that the mortgage market has evolved considerably, with lenders increasingly recognising the challenges facing first-time buyers. We are seeing more flexible affordability criteria, lower deposit requirements and products designed to help people onto the property ladder.

Borrowers with smaller deposits do have options. ‘Halifax offers an option for eligible first-time buyers to purchase a property worth up to £300,000 with a deposit of just £5,000,’ says Les. ‘This could make a significant difference to those struggling to save while renting. Of course, homeownership comes with additional costs and responsibilities, and a mortgage won't suit everyone. However, my concern is that too many potential buyers are ruling themselves out without exploring their options.’

Options for first-time buyers

Many people believe they won’t qualify for a mortgage because they have a smaller deposit, are in debt, or are self-employed. However, with support from an experienced broker, you might find that you are eligible.

The reality is that lenders differ: each has its own criteria and considers a wide range of factors when assessing mortgage eligibility. An experienced broker will listen to your situation and approach the right lenders for you.

‘My message to renters is simple: don't assume you can't get a mortgage,’ adds Les. ‘Speak to an experienced, whole-of-market mortgage broker who can assess your circumstances and help you understand what might be achievable. You could be closer to owning your first home than you think.’

Here are some key things to know about getting a mortgage:

  • Lower-deposit mortgages are available if you haven’t built up substantial savings.
  • Some lenders may accept a deposit as low as £5,000.
  • Specialist mortgage options are available for self-employed applicants.
  • The right mortgage broker can help you understand your options.
  • If you’re not ready to apply yet, a broker can advise you on the steps needed to prepare.

If you’re ready to say goodbye to rising rental costs, we’re here to help with bespoke advice and support that’s tailored to your needs.