I’m effectively spending £12,000 each year on rent, which could be going towards building a deposit to own a home. But I can’t save, because I need somewhere to live.

For George, owning a home isn’t simply about getting onto the property ladder. It represents the point when he feels he can properly start building his life.

“Once I’ve got my own home, I can then start planning what I want to put in it when I want to start a family and where I can lay down roots.”

George, 25 years old, currently lives in Hackney, London, sharing a small three-bedroom ex-council home with friends from university. Until recently, there were three of them sharing the property.

In total, the rent is around £3,000 a month with bills on top.

A graduate from the London School of Economics, George works as a receptionist and is saving to complete a law course. 

For the past year, he’s managed to put away £500 every month to pay for his course. It’s a great achievement, but it’s also exposed the problem he faces. The money he’s able to save has several competing demands.

He needs to invest in his education to improve his future earnings. He wants to start building a deposit for a home. And he still needs enough money to live today.

The desire to own his own home

George’s story isn’t about someone who needs to be persuaded to save. He’s already saving £500 a month. 

Nor is it about someone who doesn’t understand the sacrifices involved in buying a home. He’s already making them. 

And it certainly isn’t about someone who has given up on homeownership. He wants the security of knowing where he’ll live, to build his career, to put down roots and start a family.

For George, saving isn’t a question of motivation. He’s already doing it. 

The problem is how much more he would need to sacrifice to save for a deposit at the same time, as the traditional route into house buying requires him to fund his life ambitions while paying high rent just to have somewhere to live.

George enjoys living with his friends and the arrangement works for this stage of his life. But he knows it can’t last forever. 

“There’s a time limit on how long they will want to live with me and me with them.”

If a flatmate moves on, someone else needs to be found to share the costs. Living there alone simply isn’t an option. 

The annual rent is around the same as George’s £30,000 salary. He’s currently spending half of his income on somewhere to live, which isn’t helping him get any closer to somewhere of his own.

“If my rent was cheaper, I would have been able to save more. Those extra few hundred could have gone into a house budget.”

Saving £500 a month also means making sacrifices that go far beyond buying fewer coffees or cancelling the occasional night out.

Saving means making choices

George meal preps and buys cheaper food. He worries about what he spends when he goes out. Trips home to family and friends in Nottinghamshire must be weighed against the cost of a train ticket. And he doesn’t have Netflix, Apple TV or other streaming subscriptions.

George explains:

“What’s difficult about saving is the fact that you must neglect a lot of the parts of your life. Rent is my highest monthly cost, but it’s the lack of what I have going out that is also probably more notable. And there is a social cost too. I do neglect my friendships because of making a choice to save.”

George sees owning a home as much more than a financial investment. It’s about certainty, security, freedom and comfort. 

He wants to plan his career around where he chooses to live, to think about starting a family, and become part of a community rather than potentially having to re-establish himself somewhere new every few years.

“For me, everything centres around where you live. I currently commute for around an hour to get to work, and where I can afford to live affects the jobs I can consider, where I can study and how I spend my money.”

A home of his own would give him something renting can’t easily provide: a permanent base from which to make those decisions. 

Living in London, George is conscious of the prices being asked for relatively modest homes. The property he currently rents, he believes, would cost around £450,000 to £500,000 to buy.

It feels like where your life starts

For George, buying needs to feel financially worthwhile. 

“If I were to buy somewhere, I would be protecting my asset and the amount of money that I’m putting in.”

And this is what frustrates him about his current situation. Every month, he proves that he can make a substantial payment towards a house. But when that payment is rent, it doesn’t help him build the deposit he needs to move into homeownership.

The desire to own is there. The missing piece is a realistic way of getting from renting to owning. 

When George heard how the new Own Homes rent-to-buy scheme works, one part immediately resonated with him. 

Instead of having to save a deposit on top of the money needed for somewhere to live, his monthly payment could also help him build towards ownership. 

He described it as a way of getting people out of the “purgatory” of renting, where they can’t save the deposit, and finally getting to put their foot on the housing ladder.

Then he put the problem even more simply by saying:

“This effectively £12,000 that I’m spending each year could be the deposit, except I can’t use it because I need somewhere to live.”

This is exactly the gap Own Homes is designed to bridge. 

With Own Homes, future homeowners choose a new-build home from one of our partner housebuilders. We buy the home and, when it’s ready, they move in.

They make a fixed monthly payment based on what they could expect to pay for a mortgage, with a portion going into a secure savings account towards their deposit. When they’re mortgage-ready, they can use those savings to buy the home they’re already living in. 

From paying rent to building a future

For George, that changes what his housing payment represents. 

It’s no longer a choice between paying for somewhere to live or saving for somewhere of his own. The same monthly commitment can start moving him towards both. 

“It’s the ideal phase that basically everyone like me wants to be in.”

Own Homes offers a different route. One where the money George is already paying towards his housing can start helping him move forward. 

Because, as George’s story shows, sometimes the problem isn’t that people can’t afford to save. It’s that they can’t afford to save for their future while paying for their present.

A recent review of the UK housing market, by property website Rightmove, found that average rent has reached a record high of £1,397 per month. Depending on deposit size (Loan-to-Value or LTV) and house price, it also found that average monthly mortgage repayments generally range from £1,326 to £1,768. 

In London rents have gone up 2.2% in one year and now stand at an average of £2,302 per month Then years ago, they stand at £1,679 per month.

Find out more about how you could go from renting to owning in five years at www.ownhomes.com/how-it-works/