Rising mortgage rates mean that more than half of first-time buyers now pay more on their mortgage than they did in rent.

Hamptons’ research reveals that last month, 56% took on a monthly mortgage payment that was higher than their previous rent, the largest share in at least a decade This marks a reversal from July, the last time when fewer than half (47%) paid more each month after buying.

In September, the average monthly mortgage payment taken on by a home buyer leaving the rental market reached £1,227. On average, first-time buyers are now paying £39, or 8.6%, more each month to own their home than they paid to rent it.  

The shift also reverses the pattern seen at the end of the low-interest-rate era in 2022, when most first-time buyers could reduce their monthly housing costs by buying and the main challenge was to raise a deposit in a market where house prices were rising relatively quickly.

Older

Older first-time buyers are the most likely to see their monthly housing costs rise when they buy. Last month, 67% of first-time buyers in their 40s took on a mortgage payment above their previous rent. Hamptons explains that this partly reflects older buyers choosing larger homes that will meet their needs for longer, as well as taking shorter average mortgage terms.

Head of research Aneisha Beveridge says the long-term benefits of home ownership – building equity, greater security and eventually owning a home outright – remain, but the immediate monthly saving that once rewarded tenants for making the leap has largely disappeared.

Agreed

Newly agreed rents across Great Britain rose by 2.7% over the last 12 months - the fastest pace since November 2024 – taking the average rent to £1,433 per month.

“Rental growth on newly let homes continues to gather pace, with the acceleration now spread fairly evenly across markets outside the capital,” says Beveridge. “So far this year, higher rents have mainly been felt by tenants moving home. But if growth continues to pick up, it is likely to feed through to more existing tenants in the coming months as the gap between new and existing rents widens.”

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