The Office for National Statistics (ONS) English Housing Survey, looking at people’s experiences with the housing crisis, found that a third of owner-occupiers said they had at least £50,000 in savings, compared to the equal proportion of private renters – 32% – who had between £5,000 and £15,999.
Just over a third – 34% – of social renters said they have saved between £1,000 and £4,999.
Homeowners were also more likely to have savings in general, with 79% reporting they had money stashed away, compared to 52% of private renters and 28% of social renters.
Private renters spend more of their income on housing
The ONS data also showed that private renters spent the highest share of their income on housing, at 34%, followed by social renters, at 19%, and mortgagors, who used 19% of their income on housing costs.
The research also found that across all tenures, people in the lowest income bracket spent a larger share of their income on housing than those in higher-income quintiles.
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Further, households with dependent children spent a smaller proportion of their income on housing than those without children. It found the difference was bigger for private renters, at 30% versus 36% respectively, while it was split between 18% and 19% for those with a mortgage.
Private renters spend a larger proportion of their income on rent from 2019-20 to 2023-24, rising from 32% to 34%.
The ONS said this was more pronounced for those on lower incomes, who saw this rise from 56% to 63%.
The share of income spent on housing costs stayed broadly stable for mortgaged households over the decade, but in London, this rose notably from 19% in 2019-20 to 24% in 2023-24.
Overall, households in the lowest income bracket, those with children and those in London were more likely to report finding it difficult to afford housing costs.
Access to homeownership
The ONS found the number of first-time buyer households rose from 617,000 in 2013-14 to 827,000 in 2019-20, then up to 975,000 in 2023-24.
In 2023-24, most first-time buyers were aged between 25 and 34, making up 60% of the demographic. Meanwhile, 21% were aged between 35 and 44. Just 10% were between the ages of 45 and 64, 7% were 16-24 and 2% of first-time buyers were 65 or over.
The ONS found the age profile was similar to a decade before, but there was more of a likelihood of first-time buyers aged between 45 and 64, which rose from a share of 4% in 2013-14.
A smaller proportion of first-time buyers purchased in London than a decade ago, falling from a quarter to 15%.
Some 40% of first-time buyers paid a deposit of 10-19% of the property price in 2023-24, down from 45% 10 years earlier.
There was a recent rise in the share putting down a deposit of 20-29%, rising from 13% in 2019-20 to 22% in 2023-24.
Plans to get on the housing ladder
The ONS found that around 2.6 million private renters and one million social renters had plans to buy a home in the future.
Private renters were more likely, making up 57% of respondents expecting to get on the housing ladder compared to 25% of social renters.
Younger private and social renters were also more likely to expect to buy than older renters, as were those in London.
Majority of first-time buyers use savings to purchase
The ONS’ data showed that the majority – 86% – of first-time buyers used money from their savings to contribute to the deposit.
Some 31% said they were gifted or loaned money from family or friends in the multi-choice question, while 12% used other sources, and 9% inherited the money.
Younger first-time buyers were more likely to use savings for their deposit compared to older buyers, at 91% for those aged 25-34 compared to 59% for those aged 45-64.
Buyers in lower income brackets were also less likely to use their savings, while lone female purchasers were less likely to use gifts or loans from family and friends.
The ONS found little difference between how money was sourced for a deposit among first-time buyers in London and outside the capital.
The data showed 85% of first-time buyers had mortgage terms of 25 years or more, and this was more common with younger homeowners and buyers outside of London.
Adults who cannot afford to rent or buy
The ONS also looked at the households with adults who would otherwise form households of their own but could not afford to rent or buy elsewhere, or ‘concealed households’. This is determined as people such as grown-up children, nieces and nephews, adult siblings, friends, or parents or grandparents.
The data showed there were around one-and-a-half million of these households in England, making up 6% of all households.
It assessed the characteristics of the person whose name the owned or rented accommodation was in.
It found the highest share of these households was in the social rented sector, making up 8% of homes, then 6% in owner-occupied households, and 5% in private rented.
Around 400,000 concealed households also had a dependent child, but this did not necessarily mean the child was part of the concealed household.
More households in the name of someone from an ethnic minority background – 8% – had at least one adult living there who could not afford to rent or buy elsewhere. This was higher than the 6% of households in the name of a white person.
Households in the higher income brackets were also more likely to be part of the concealed household demographic.
This article was first published on YourMoney.com‘s sister site, Mortgage Solutions. Read: Homeowners have over 10 times more in savings than renters – ONS
