For many years, there was a fairly simple financial trade-off for renters looking to buy their first home. Saving a deposit was the difficult part, but once they had the keys, their monthly mortgage payment was often lower than the rent they had left behind. But that equation has changed.
More than half (56%) of first-time buyers who purchased a home in September 2026 took on a mortgage payment which was higher than their previous rent, according to new Hamptons analysis using Connells Group data. That's the highest proportion in at least a decade and up from 33% in September 2022.
The changing cost of getting onto the property ladder
The average first-time buyer leaving the rental market in September took on a monthly mortgage payment of £1,227. That's £39, or 8.6%, more than their previous rent. Put another way, for every £1 they previously spent on rent, they're now spending £1.09 on their mortgage.
It's a marked change from the final years of the low-interest-rate era. In September 2022, first-time buyers typically paid just 90p towards their mortgage for every £1 they had previously spent on rent. Back then, raising a deposit was generally the bigger financial hurdle, particularly while house prices were rising relatively quickly.
Higher mortgage rates have now turned much of that calculation on its head. The long-term attractions of homeownership haven't disappeared. Buyers are building equity, gaining greater security and slowly moving towards owning their home outright. But the immediate monthly saving that once accompanied the move from renting to buying has largely gone.
A bigger deposit can make all the difference
While interest rates play an important role in determining the overall picture, for individual buyers in any given year, the size of their deposit remains a big deal.
First-time buyers whose mortgage payments exceeded their previous rent bought with an average loan-to-value ratio (LTV) of 91% in September, equivalent to a 9% deposit. Those whose mortgage was cheaper than their former rent had an average LTV of 83%, equivalent to a 17% deposit.
Age makes a difference too. Buyers in their 40s saw the biggest increase, with mortgage payments averaging 18.2% more than their former rent. Buyers in their 30s paid 6.9% more, while those in their 20s still paid 7.5% less on average.
Part of the difference reflects the choices buyers make at different stages of life. Older first-time buyers tend to purchase larger homes and take shorter mortgage terms. The average term was 27 years for buyers in their 40s, compared with 31 years for those in their 30s and 34 years for buyers in their 20s.
Meanwhile, rents are rising faster
Buying may have become more expensive in the short term, but renters are also facing renewed pressure.
The pace of rental growth accelerated for the tenth consecutive month in September. The average rent on a newly let home in Great Britain reached £1,433 per month, 2.7% higher than a year earlier and the fastest annual growth since November 2024.
The acceleration is also relatively widespread. Both the South East and South West recorded annual growth above 4% for the first time since September 2024. Greater London's newly agreed rents, meanwhile, rose 1.5% year-on-year to an average £2,357 per month.
So far this year, it's largely tenants moving home who have felt the effect of higher rents. Rental growth across all existing tenancies has actually slowed, from 3.9% a year ago to 1.9% today. But the widening gap between new and existing rents is unlikely to persist indefinitely. If growth on newly let homes continues to accelerate, more existing tenants are likely to feel the effect as their rents change.
For prospective first-time buyers, that makes the decision more nuanced than it was during the era of ultra-low interest rates. Buying may no longer deliver an immediate monthly saving for most, but the balance between today's mortgage payment, future rental costs and the longer-term benefits of ownership remains at the heart of the decision whether to buy.
