Renting vs Rent-to-Own vs Buying: A Practical Example

The journey from renting to homeownership in the UK has never felt more challenging. House prices remain high, mortgage criteria are increasingly strict, and saving a deposit while paying rent can feel almost impossible. However, private rent-to-own models are emerging as a practical bridge between renting and buying.

Renters vs Homeowners in the UK: The Stats

Homeownership remains a major aspiration, yet affordability challenges are shifting the landscape:

• Only around 52–55% of 25–34-year-olds own a home, compared to over 65% two decades ago.
• The average first-time buyer deposit now exceeds £60,000 - far beyond what most renters can save while paying increasing rents.
• Private renting accounts for roughly 20% of all UK households, the highest level since the 1960s.
• Mortgage rejection rates have increased, driven by tighter affordability stress tests and rising interest rates.

The bottom line: the traditional route to homeownership is getting harder, not easier.

Why Buying a Home Is So Difficult Today

For many first-time buyers, these hurdles feel all too familiar:

1. Saving a deposit is extremely difficult

Rents have climbed faster than wages, leaving little room to save. Many buyers need 5–20% deposits, which can take years to accumulate.

2. Mortgage affordability is strict

Interest rates remain higher, meaning buyers qualify for smaller mortgage amounts, even with the same income.

3. Eligibility hurdles

Credit history, employment type, time in the UK, student loans, existing debt, and credit score issues can all block mortgage approval.

4. High property prices

Even small flats require large deposits and mortgages. For example, a typical one-bed London flat easily costs £350k–£400k.

5. Additional fees

Stamp duty (where applicable), solicitor fees, valuation fees, surveys, moving costs - all add up.

6. A complex, stressful process

Property chains, mortgage offers, surveys, and legal work can make the buying process slow and unpredictable.

What Is Rent-to-Own?

Rent-to-own bridges the gap between renting and buying by letting you move into your future home now, rent for a fixed period, and buy later - without needing a deposit upfront.

Key benefits include:

• Transition between renting and buying
• 100% of rent refunded as your deposit if you buy
• Two years of fixed rent
• A guaranteed buyback price agreed at the start (no obligation)

Renting vs Rent-to-Own vs Buying

Case Study - Renting to Owning

Meet Sarah and Daniel

• Sarah, 30, is a NHS physiotherapist (a keyworker).
• Daniel, 27, works as a junior analyst in a London fintech company.
• Combined income: £75,000
• Savings: £0
• Monthly savings ability: £500
• Target: A £385k one-bed flat in London

They want to buy their first home, but like many renters, they’re struggling to build a deposit while paying high rent.

Option 1: Keep Renting & Saving

• 1-year lease x 2 years
• £1,800 per month rent, increased annually
• No option to buy
• After 2 years: £12k saved
• Only a 3% deposit, still short of the required 5%
• Need a £373k mortgage
• But on their income, they can only borrow up to £337k
• They would need another 3-4 years of saving
• Homeownership remains out of reach

Option 2: Keyzy Rent-to-Own

• 2-year lease signed
• £1,800 per month fixed rent (no increases)
• £385k guaranteed buyback price (optional - not required to buy after 2 years)
• After 2 years they’ve built:
  • £43k credit from rent
  • £12k in saved cash
• Total deposit available: 14%
• They now only need a £330k mortgage
• With their combined income, this is affordable and within typical lending limits
• Their mortgage would cost £1,628 per month (based on a 30-year term, 4.25% 2-year fix)
• They’re officially on the property ladder in just 2 years!

Why Rent-to-Own Works So Well for First-Time Buyers

Rent-to-own unlocks homeownership for people who are:

• Struggling to save a deposit
• Facing strict mortgage eligibility
• Wanting predictable rent (no surprises for two years!)
• Needing more flexible criteria than traditional lenders
• Recently moved to the UK and lack long credit history
• Unsure about committing to a home without trying it first
• Wanting a fixed, future purchase price to plan with confidence

It’s a practical path for renters who feel “stuck,” but still want to own.

The Takeaway

For many renters, the dream of homeownership hasn’t disappeared - it’s simply been delayed by factors outside their control. Rent-to-own bridges that gap, offering stability, predictability, and a fair shot at buying your home. A path to ownership doesn’t have to take five or ten years. With the right support and structure, it can start today. Find out more about rent-to-own at keyzy.com