One in five tenants put their property purchase aspirations on hold due to high mortgage rates

One in five renters are putting plans to buy a home on hold during the current housing crisis, new figures show.

Overall, 19 percent of renters surveyed by specialist mortgage lender The Mortgage Lender said high mortgage rates mean they can’t afford to buy a home.

It follows the two-year average fixed rate that hit 6.66 percent this month, according to Moneyfacts.

It’s the equivalent of a mortgage payment of around £1,000 a month on a £150,000 mortgage.

The TML survey also suggested that 12 percent of renters would continue to rent until home prices fell.

According to the latest official figures, house price growth is already slowing, from 3.2 percent in the year to April to 1.9 percent in the year to May.

The median house price in the UK is £286,000, £6,000 higher than 12 months ago – but still £7,000 below its recent peak in September 2022, according to the Office for National Statistics.

A further slowdown is expected as the full magnitude of the recent increases in mortgage interest rates is felt.

Future plans: according to the TML survey, a total of 12% of renters will not buy their own home until house prices fall

For some tenants, keeping an eye on the numbers is key to determining their next move.

In total, 10 percent say they are waiting for a fall in mortgage rates. At the same time, nine per cent agreed there is no point in buying until interest rates fall, and six per cent are waiting for the Bank of England’s next interest rate decision on August 3 before making a decision.

Despite this, 6 percent said they were still making progress with their home-buying plans, even though they have to make significant compromises to do so.

A quarter of those still planning to buy say they are now buying outside traditional commuter towns, and 32 percent have had to move further from the city centre.

Similarly, 16 percent buy in an area with cheaper housing costs to offset the more expensive mortgage.

Overall, 9% agreed that there is no point in buying until rates fall

Others have to rethink the properties themselves. One in five – 21 percent – say they’re buying a cheaper home that needs more renovation work, and 12 percent want to buy smaller properties instead.

TML surveyed 2,005 adults, 905 of whom were renters – and these results only focus on this segment of renters.

Steve Griffiths, from TML, said: ‘The journey to buying a home can be a long one, and it can easily be complicated by the ebb and flow of the housing market, especially when looking at the current landscape.

While being flexible and checking base rate regularly will serve tenants well in the long run, it’s understandable that so many feel frustrated with their options.

“If now isn’t the right time to buy, but you plan to do so in the future, make sure you’re still in the process of getting ‘mortgage-ready.’ That way you can be sure that you are ready at the right time to take that next step.’