Over 2000 people who currently live in privately rented homes were polled revealing that found that 35% are actively saving to buy a home, with 73% in the process of saving for a deposit.
When asked to consider the impact of the cost-of-living crisis on a range of different financial behaviours, 56% expressed reduced optimism in their capacity to save for a deposit, either responding that they are only slightly confident or not confident at all.
As part of the research, undertaken by Paragon Bank, aspiring homebuyers were also asked when they expect to buy a home, with the ability to save for a deposit appearing to influence the amount of time tenants anticipate remaining in their rented home.
Four in 10 of those who feel it is unlikely that their saving will be impeded predict being ready to purchase in the next one to two years, whereas a similar proportion (44%) of those who are not confident in raising the funds for a deposit expect to buy a home within three and five years, the most common timeframe amongst this cohort.
28% of those who are confident in their deposit-raising ability expect to buy a home within the next six to 12 months, falling to one in 10 amongst those who feel their capability will be compromised.
The study also found that 37% of buyers aim to put up 10%, making it the most common deposit size. 23% already have the deposit money while the remaining 4% are already in the process of purchasing a property.
Richard Rowntree, Managing Director for Mortgages at Paragon Bank said: “Our latest tenant research confirms the logical expectation that the pressure placed on household finances will limit the capacity for some people to save for the deposits necessary to buy their own home.
“This has implications for the private rented sector because a sizeable proportion of these aspirational homebuyers will remain in rented properties for longer while they battle the rising cost of living to put aside funds needed to secure a mortgage. In turn, this will place further pressure on the supply of rented homes which is already surpassed by demand, exacerbating rising rents and limiting choice for tenants.
“This helps to reinforce my view that different housing tenures are inextricably linked, with the population moving between them influenced by their needs at the time. As a result, each tenure should be viewed equally, and policy should reflect this to minimise any barriers to much-needed investment.”