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Cost of living · The home · UK · 1996 and 2025 data

Why is the home the biggest difference?

Rent now takes 50p of each £1 a typical full-time worker takes home, against 32p 30 years ago. Owning the average home took about 10 years of take-home pay 30 years ago, counting the rent paid while saving. It takes about 20 now. The monthly mortgage payment is not the problem. The deposit, the rent while you save and the wait are.

Evidence last reviewed 29 October 2026

The route to owning

Survey-based evidence
Family Expenditure Survey 1996-97 and ONS Family Spending 2024-25Fieldwork: 1996-97 and April 2024 to March 2025UK household surveys, used for what a household spent in each year. Aggregate means only; no respondent records are published. Sample limits are in the workings.
Years from first saving to owning the average home: saving the deposit, then paying the mortgage.
30 years ago
2.325 years

2.3 years saving, then 25 years paying: about 27 years in all.

Now
13.635 years

13.6 years saving, then 35 years paying: about 49 years in all.

Saving the depositPaying the mortgage

One median earner, saving a fifth of take-home pay, renting while saving, then buying the average home.
30 years ago (1996)Now
Years saving the deposit2.313.6
Rent paid while saving£8,536£220,090
Deposit£5,342£87,897
Every mortgage payment25 years in 1996, after tax relief; 35 years now£102,563£346,824
Years from first saving to owning2749
Whole cost to own£116,441£654,810
In years of take-home pay10.020.3

To compare the two routes, today’s whole cost is spread over the same 27 years the 1996 buyer took. On that basis the home takes 37p of each £1 of take-home pay in 1996 and 74p now. That is 2.0 times as much.

This is a measure of the whole route. It is not what anyone pays in a single year. The sections below show the monthly figures.

The deposit is the wall

The deposit is whatever the loan does not cover. In 1996 it was 10% of the price, £5,342. Today it depends on how much a lender gives a single earner. At 4.5 times pay it is £87,897, which is 16.5 times the 1996 deposit.

Lenders do not all use 4.5 times pay. ONS puts the average first-time buyer’s loan at 3.6 times income in 2025, but that includes joint incomes. The median loan is 85.6% of the price. Some lenders offer more than 4.5 times income.

A couple is different. Two people on this pay could borrow up to £358,769 at 4.5 times their joint pay, more than the average home’s £267,281. For them the loan is not the limit; the lender’s minimum deposit is, usually 5% to 10% of the price (£13,364 to £26,728). That is the case the housing page follows, with two earners saving for 10%: buying a first home. This page follows one earner, the life in the headline.

Same earner, same average home. Only the amount a lender gives changes.
A lender givesLoan as a share of the priceDepositYears to save itRise in the cost of the same life as 30 years ago
4.0 times pay60%£107,82816.7+32%
4.5 times pay (central case)67%£87,89713.6+28%
5.0 times pay75%£67,96510.5+25%
5.5 times pay82%£48,0347.5+24%

The rule is changing. From 28 October 2026 the regulators remove the cap on each lender’s own share of high loan-to-income mortgages. The limit across all lenders stays at 15%. A high loan-to-income mortgage is still one of 4.5 times income or more (PRA policy statement 19/26).

The monthly payment is not the problem

A 1996 buyer paid about £319 a month after tax relief, 33% of take-home pay. A buyer today with a 4.5 times pay loan over 35 years pays about £826, 31%. Mortgage rates are much lower than the 7.2% average of 1996.

Rates are not steady. The Bank of England’s two-year fixed rate for a 90% loan was 4.34% in February 2026 and 5.37% in September 2026. The central case uses the 2025 average. A buyer who locked in at the higher rate pays more.

Rent while you save

Rent is the part most people feel. In 1996 a private renter paid about £310 a month (32% of take-home pay). The ONS rent index gives £1,345 today, about 50%.

The right comparison is not settled, so we show three. They differ because one is a UK mean that includes London, one is an England survey, and the 1996 figure comes from a survey, not an index.

Same model; only today’s rent changes.
Rent measureToday, a monthShare of take-home payRise in the cost of the same life as 30 years ago
ONS private rents index, UK mean (central)£1,34550%+28%
Survey to survey: Family Expenditure Survey to Family Spending£1,31549%+28%
English Housing Survey, England£1,08340%+23%

A check that does not use our model

The average home cost 3.4 years of gross pay in 1996 and 6.7 now (UK mean price over median full-time pay). The official ratio for England, which uses median prices and earnings, rose from 3.5 in 1997 to 7.6 in 2025. It ignores rates and deposits, which also decide whether people can buy. Both roughly double.

What this leaves out

  • A partner’s wage, or help from family.
  • People who bought between about 2010 and now, on whatever deal they got.
  • Any rise in house prices while the earner saves, and any interest on the savings. Prices and rent are held at their 2025 level.
  • Help to Buy and other schemes, and homes bought outside the open market.
  • Different tax rules in Scotland.

More on buying and renting: buying a first home, renting.

Sources and methods (13)

Method notes

  • The route to owning: rent while saving, the deposit and every mortgage payment, spread over the 1996 route length.
  • Take-home pay: median full-time pay after income tax and National Insurance, each year’s rules.
  • 1996 mortgage: 10% deposit, 25 years at the 1996 average rate, with tax relief on interest. Today: a loan of a multiple of gross pay, 35 years.