The cost-of-living crisis is hindering the ability of aspiring homebuyers to afford to purchase a property, said Paragon Bank.

The lender said that many of those currently renting admitted they would have to stay in rented properties for longer.

In a survey of over 2000 tenants in privately rented homes, just over a third (35%) are actively saving to buy a home, said Paragon.

Nearly three-quarters of these (73%) in the process of saving for a deposit.

Harder to save

However, over half of these aspirational homebuyers (56%) admistted they are less optimistic about their capacity to save for a deposit during the cost of living crisis.

When asked when they expect to buy a home, the most common timeframe was between three and five years from now.

The specialist lender also found that over a third (37%) of buyers aim to put up 10% as a deposit, making it the most common deposit size.

Just under a quarter (23%) said they already have the deposit money, while the remaining 4% are already in the process of purchasing a property.

Richard Rowntree, managing director for Mortgages at Paragon Bank, said: “Our latest tenant research confirms the logical expectation that the pressure placed on household finances will limit the capacity for some people to save for the deposits necessary to buy their own home.

“This has implications for the private rented sector because a sizeable proportion of these aspirational homebuyers will remain in rented properties for longer while they battle the rising cost of living to put aside funds needed to secure a mortgage. In turn, this will place further pressure on the supply of rented homes which is already surpassed by demand, exacerbating rising rents and limiting choice for tenants.”