45% of renters surveyed for Aldermore say owning a home is a life goal of theirs, with 26% actively saving for a deposit currently, with the greatest intentions being among renters in Northern Ireland, Greater London, and the South East.
The experience of the pandemic and lockdown among renters has strengthened home ownership ambitions, with 26% saying lockdown has made them more motivated to buy their own home.
However, home ownership is proving difficult. The biggest obstacle for home ownership according to renters is raising a deposit (30%), affordable house prices (17%) and high rent costs (13%).
8% of renters see securing a mortgage as their biggest obstacle.
28% of private renters say credit history is a big concern, with 38% looking to actively improve their credit score to increase their chances of securing a mortgage.
The main credit issues of private renters include having an overdraft (26%), credit card debt (25%), gaps in employment (21%), responsible for dependants (17%), and missed bill payments (15%). There is also a noteworthy proportion that have more significant credit issues with 8% having an account handled by collection agencies, 7% have taken out a payday loan, and 5% having a County Court Judgement (CCJs) in their past.
During Covid, 22% of renters have been placed on furlough or lost employment since the outbreak. 12% have missed or been late on rent payments this year, and 14% say they have had to dip into their savings to get by day-to-day.
The average rent in the UK among those surveyed was £648 a month, with the highest rents in Greater London (£926), South East (£740) and South West (£679), with 14% of private renters saying they have experienced a rent increase since the Covid-19 outbreak in March.
69% of 18-34 year olds say owning a home is a life goal of theirs with a further 45% citing that the lockdown period has made them more motivated to achieve this goal. Furthermore, while 24% have missed or been late on rent payments this year, 49% of millennials and Generation Z are taking measures to improve their credit rating.
Jon Cooper, head of mortgage distribution at Aldermore, said: “The experience of lockdown has focused renters’ minds to work towards owning a home more than ever before, but it is clear from the data that renters see credit issues in their past as a problem for them. And with many dealing with furlough and reduced incomes recently, it is understandable they may feel the dream of home ownership is far from reach.
“However, the challenges they face are not as large a barrier to buying a home as it may have been in the past. Specialist lenders, like Aldermore, consider borrowers with credit issues, including debt and CCJs, alongside those experiencing furlough, so options are open as we begin the new year for renters that previously may have been turned away from high street lenders.”