If you’re a young adult in the UK trying to decide between renting and buying, the numbers are brutal. Private renters now spend an average of 34% of their income on housing, the highest share of any group, according to the English Housing Survey for 2023-24. That means for every £100 you earn, roughly £34 goes straight to your landlord before you’ve paid for food, transport, or anything else. I’ve been covering housing affordability for years, and the pattern I keep seeing is that the goalposts keep moving — just as you save enough for a deposit, prices or interest rates shift again. Here’s what you actually need to know.
That 34% figure is an average, which hides the real pain. For private renters in the lowest income bracket, the proportion of income going to rent jumped from 56% in 2019-20 to 63% in 2023-24. That’s not a housing cost — that’s a financial stranglehold. Meanwhile, the number of first-time buyers has actually risen to 975,000 households in 2023-24, up from 617,000 a decade earlier. So people are still buying, but the path is narrower and more expensive than ever. If you’re weighing up your options, it helps to understand whether micro-living or tiny homes could be a viable alternative while you save. A practical step is to track your actual housing costs with a budgeting tool or app — something like a simple spreadsheet can reveal where your money is really going each month.
The real cost gap between renting and owning
Here’s the core tension. The monthly cost of owning a first home is now £1,231, while renting an equivalent property costs £1,258, according to the Halifax Owning vs Renting Review. That’s only a £27 monthly difference — the smallest gap since 2019. But that headline hides a messy reality. In the East of England, renters are £2,325 better off each year compared to buyers. In the South West, owners save £1,663 annually. So the answer to “rent or buy?” depends entirely on where you live.
What I’d do if I were in my twenties today: I wouldn’t assume buying is always the smarter move. The old rule that “renting is throwing money away” ignores that mortgage interest, maintenance, insurance and stamp duty are also costs you never get back. In regions where renting is cheaper, you can invest the difference. The key is knowing your local numbers, not following a generic rule.
Why this gap matters for your financial future
The gap between renting and owning isn’t just about monthly cash flow — it affects your long-term wealth. Private renters are the most likely to report difficulty affording their housing costs, at 32%, compared to just 14% of mortgagors. That stress compounds over time. If you’re spending 63% of your income on rent, you’re not saving for a deposit, you’re not investing, and you’re one emergency away from financial trouble.
Consider this scenario: a 25-year-old in the East of England earning the regional median salary. Renting saves them £2,325 a year compared to buying. If they invest that difference in a low-cost index fund averaging 5% annual growth, after 10 years they’d have roughly £29,000 — a decent deposit. But if they’re in the South West, buying saves them £1,663 a year, so renting would actually slow them down. The right answer flips depending on your postcode.
I’ve noticed that many young people assume buying is always the goal, but the data shows that the build-to-rent sector is exploding for a reason — more people are choosing longer-term renting with better amenities. That’s not failure, it’s adaptation. My take: don’t let social pressure push you into a purchase that doesn’t make financial sense for your specific situation.
Where people get the renting vs buying decision wrong
Most of the mistakes I see come from relying on outdated advice or national averages instead of local data. Here are the most common errors.
Assuming renting is always cheaper than buying
In 2023-24, the Halifax data shows that in the South West, London and Scotland, owning a first home is actually cheaper than renting. The South West offers the biggest saving for owners at £1,663 per year. If you’re in one of those regions and you assume renting is the frugal choice, you could be costing yourself over a hundred pounds a month. Always check your local market, not the national headline.
Ignoring the hidden costs of buying
Many first-time buyers focus only on the deposit and monthly mortgage payment. But the ONS data shows mortgage repayments have risen 61% for an average semi-detached home. On top of that, you’ve got stamp duty (though first-time buyers get relief on properties up to £425,000), solicitor fees, surveys, moving costs, and ongoing maintenance. A new boiler can cost £2,000-£4,000. A roof repair might run £5,000+. These aren’t optional — they’re part of ownership.
Overestimating how soon you’ll buy
The English Housing Survey found that 2.6 million private renters expect to buy a home in the future — that’s 57% of all private renters. But the reality is that many won’t. The number of concealed households (people living with family because they can’t afford their own place) has stayed at 6% of all households since 2013-14. That’s 1.5 million households containing someone who wants to move out but can’t. If you’re 25 and living with parents, you’re not alone — 54% of people in concealed households are aged 16-24. The gap between expectation and reality is wide.
Not factoring in regional rent trends
Average UK monthly private rents hit £1,381 in April 2026, up 3.5% annually. But that varies hugely: £1,438 in England, £834 in Wales, £1,019 in Scotland, and £877 in Northern Ireland. If you’re renting in London, you’re facing the highest costs and the most competition. If you’re in Wales, your rent is nearly half the English average. A decision that works in Cardiff may be disastrous in Cambridge. The table below shows how the gap varies across the UK.
→ Scroll right to see all columns
| Region | Annual saving: renting vs owning | Which is cheaper? |
|---|---|---|
| East of England | £2,325 | Renting |
| South East | £1,859 | Renting |
| East Midlands | £1,741 | Renting |
| Yorkshire & the Humber | £1,731 | Renting |
| South West | -£1,663 | Owning |
| London | -£319 | Owning |
| Scotland | Data not specified | Owning |
What I’d do differently: I’d run the numbers for my specific city, not my region. A regional average can hide big differences between, say, Bristol and Exeter within the South West. Use a rent vs buy calculator that includes maintenance, insurance, and opportunity cost of your deposit. And if you’re in a region where renting is cheaper, don’t feel pressured to buy — invest the difference instead.
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How to make the right decision for your situation
There’s no universal answer, but there is a process. Here’s how I’d approach it if I were starting from scratch.
Calculate your true housing cost ratio
Your housing cost ratio is what you spend on housing divided by your after-tax income. The English Housing Survey shows private renters average 34%, but mortgagors average just 19%. If your ratio is above 30%, you’re in the danger zone — especially if you’re renting. To calculate yours, add up rent or mortgage + bills + insurance + maintenance (estimate 1% of property value annually for a home you own). Divide by your monthly take-home pay. If it’s over 30%, you need to either increase income, reduce housing costs, or both. A simple way to track this is with a budget planner notebook to keep your monthly numbers visible.
Compare your local rent vs buy numbers
Don’t rely on national averages. Look up the average rent for a three-bedroom home in your area, then compare it to the monthly mortgage cost for an equivalent property (use a mortgage calculator with today’s interest rates). The Halifax data shows that in 9 out of 12 UK regions, renting is cheaper. But in the South West, London and Scotland, owning wins. If you’re in a renting-cheaper region, calculate how much you could invest monthly. If you’re in an owning-cheaper region, start saving aggressively for a deposit. If you’re unsure about the legal side of buying, speaking to a property lawyer can clarify what you’re getting into before you commit.
Factor in the future: where will rents and prices go?
Rents rose 3.5% annually to April 2026, and mortgage repayments have jumped 61% for an average semi-detached home. Those trends aren’t slowing. If you buy now with a fixed-rate mortgage, your monthly payment is locked in for 2-5 years. If you rent, expect your landlord to increase rent annually — possibly above inflation. Over a 10-year horizon, buying often wins in markets where rents are rising fast and house prices are stable or growing. But if you’re in an area where prices are flat or falling, renting and investing the difference can outperform. This is where the repurposing of commercial space into apartments could increase housing supply and moderate prices in some cities — worth watching if you’re planning ahead.
Build a plan for the deposit gap
The biggest barrier for most young people isn’t the monthly cost — it’s the deposit. With 975,000 first-time buyers in 2023-24, people are managing it, but it’s harder than a decade ago. If you’re a private renter expecting to buy (57% of you, according to the survey), here’s a realistic path: set a target deposit amount (typically 10-15% of the purchase price), automate a monthly transfer to a Lifetime ISA (you get a 25% government bonus up to £4,000 per year), and cut your housing cost ratio below 30% first. If you’re living in a concealed household (living with family), that’s your biggest advantage — use the low or zero rent period to save aggressively. A home safe deposit box can help you keep your savings documents and cash secure while you build your fund.
- 1Calculate your housing cost ratioAdd up all housing costs, divide by after-tax income. Target under 30%.
- 2Compare local rent vs buy costsUse the Halifax data as a starting point, then check your specific city.
- 3Open a Lifetime ISADeposit up to £4,000 per year and get a 25% government bonus — free money toward your first home.
- 4Automate your savingsSet up a standing order on payday so you never see the money you’re saving.
Frequently asked questions
Is renting really cheaper than buying in 2024? ▾
What percentage of my income should go to rent? ▾
How many first-time buyers are there in the UK? ▾
What is a concealed household? ▾
Should I use a Lifetime ISA for my first home? ▾
How much have mortgage repayments increased? ▾
Your next move
The brutal truth is that neither renting nor buying is a clear winner in 2024 — it depends entirely on where you live, what you earn, and what you want your life to look like in five years. What I’d do right now: calculate your housing cost ratio, check your local rent vs buy numbers, and open a Lifetime ISA if you haven’t already. The decision isn’t about following a rule — it’s about knowing your numbers and acting on them. If this was useful, you might also want to read Downsizing in the UK: The Ultimate Guide to Making It Work.
Sources and Further Reading
Why UK housing associations are a growing investment opportunity — Explores an alternative route into the housing market if buying a home directly feels out of reach.
English Housing Survey 2023 to 2024: experiences of the housing crisis. Ministry of Housing, Communities and Local Government, 2024.
Private rent and house prices, UK: May 2026. Office for National Statistics, 2026.
Renting now cheaper than owning a first home in nearly all UK regions. Halifax/Lloyds Banking Group, 2024.
