5 Things Single People Should Know Before Entering the Housing Market

Everyone wants a place to call their own, a sanctuary where you can relax at the end of a hard day at work, make meaningful memories, and show off your interior décor skills. Living with your parents is great for a while, but eventually you want the freedom that comes with your very own space.
The only problem? Actually getting a home of your own is much harder than it seems. Whether you’re buying or renting property in the UK, there are a lot of hoops to jump through before you can get your hands on that first set of keys.

In fact, as of 2024, only 50% of UK adults owned their own home. It probably won’t surprise you to learn that many of those homes are owned by co-habiting couples. However, the number of single people buying or renting property alone in the UK is increasing, despite the financial challenges. The ONS found that the number of people living alone increased by 16% between 1997 and 2017.

That means that although there were around 7.7 million people living on their own in 2017, by 2039, the ONS believes this number will grow to a huge 10.7 million.

So, what does this tell us? Living alone isn’t impossible, and it’s definitely becoming more common. However, there are some challenges you should be aware of if you’re entering the property market for the first time as a single person.

BUYING OR RENTING PROPERTY AS A SINGLE PERSON: THE KEY TAKEAWAYS

1.    Renting will Cost More than Buying a Home

Right now, the average cost of renting a house in the UK is about £954 per month – £42 more than the average cost of a mortgage for the same type of home.

If, like many of us, you’re worried about the cost of living crisis, and the impact the dreaded single tax will have on your finances when buying or renting property, it’s probably a good idea to prioritise renting. For the last decade buying a home in the UK has been more affordable than renting one.

At least…if you just consider the monthly costs (we’ll come back to the issue of a deposit in a moment). In 2023, the price of renting a home in the UK increased by 6.9% in Wales, 6.2% in Scotland, and 6% in England. As the housing market continues to evolve, and fewer properties are developed, the current situation makes it almost inevitable that rents will keep rising.

Right now, the average cost of renting a house in the UK is about £954 per month – £42 more than the average cost of a mortgage for the same type of home. Other studies show first time buyers can expect to pay around £1013 per month in rent for a three-bedroomed house, compared to £971 in monthly mortgage costs.

…But You’re More likely to Rent if You’re Single

Unfortunately, while renting is more expensive, the ONS suggests that single people are statistically more likely to rent. People aged 25-64 who live alone are less likely to own their home than couples without children. This means as a single person, you’re less likely to accumulate wealth and equity through buying your home. After all, when you’re renting, you’re essentially just paying someone else’s mortgage.

2.    Getting a Mortgage is More Challenging if Your Single

Secondly, it’s much tougher to save for a deposit if you’re single. Approximately 1 in 3 first-time buyers say raising a deposit for their mortgage was the main barrier to buying a home.

Why? There are a few reasons, for one, it’s harder to prove to lenders that you have enough income as a single person to afford mortgage repayments. Groups like the HomeOwners Alliance suggest you shouldn’t spend more than 35% of your post-tax income each month on your mortgage. If, like some studies suggest, the average monthly mortgage payment in the UK is around £753, that means you’d need to be earning £2,500 a month to stick to those guidelines.

Secondly, it’s much tougher to save for a deposit if you’re single. Approximately 1 in 3 first-time buyers say raising a deposit for their mortgage was the main barrier to buying a home. While some lenders do offer “first time buyer” discounts, which allow you to pay only 5% on your deposit, the average house deposit is usually around 15%, even for a first-time buyer.

The bigger your deposit, the smaller your monthly payments will be. Since the average 15% deposit on a home equals out at around £30,000, you’ll have a lot of saving to do (on your own). Unfortunately, studies show around 47% of young single people in the UK have no savings at all.

…And Saving for a Deposit isn’t Getting Easier

While a Nationwide study found that the rate at which house prices are increasing in the UK is slowing (they increased by around 0.7% in 2024), raising a deposit is still a major issue. A 20% deposit on a property now equates to around 105% of a person’s annual income. Couples might be able to join forces on this saving journey, but as a single person, you’re left scrimping yourself, while dealing with other single tax issues.

3.    Single People Don’t Have Much “Disposable Income”

The ONS notes that single people spend around 92% of their income on living expenses, whereas co-habiting couples only spend 83% of theirs.

Although buying or renting property in the UK is a goal for many of us, as a single person, you’ll need to expect that virtually all of your income will go towards essential costs and nothing else. If you want to live in your own home as a single person, and still have plenty of money left over for hobbies and saving, you may be out of luck.

The ONS notes that single people spend around 92% of their income on living expenses, whereas co-habiting couples only spend 83% of theirs. Additionally, studies show that thanks to the Single Tax, single people generally spend more on the basics each month than their coupled counterparts. In fact, an Ocean Finance Study found single people spend up to £3,195 a year  (equivalent to around £266 a month) more on living costs than co-habiting couples. The biggest contributor to this is higher mortgage and rents. Overall however, the cost of living is generally much higher for a single person than you’d expect.

While the average British person living on their own spends about £6,800 a year on household bills, two adults living together spend around £8,200 a year – which they can split between them.

With energy and food prices rising, alongside the costs you pay for buying or renting property, the problem is likely to get more difficult in the years ahead.

…And You Won’t Have Access to Much Government Support

Unfortunately, while there are plenty of government bonuses available for married couples, to make the cost of living crisis easier to manage, single people are often overlooked. You’ll only get a 25% discount on your council tax bill (why not 50%?).

Plus, you’ll miss out on the Married Couples Allowance, and similar possible financial bonuses. While single people are rallying against the government, requesting more support, we’ve yet to see any major policy changes in the UK that support single homeowners or renters.

4.    Purchasing Property with Friends is Becoming more Common

According to data from the Mortgage Advice Bureau, around 7% of prospective homebuyers are now planning on buying a property with a friend.

With the rising cost of renting to contend with, alongside other single tax issues, it’s little wonder that some first-time entrants to the property market are looking for new ways to make buying a property a little more affordable. For instance, we often assume joint mortgages should always be between romantic partners. However, that could be starting to change, particularly among younger generations. The Mortgage Advice Bureau say that around 7% of prospective homebuyers are now planning on buying a property with a friend.

Among people between the ages of 18-24, the number of people planning a “friends mortgage” is even higher (23%). Its been reported that ultimately, many younger would-be homeowners don’t see why they should give up their single lifestyle just to make the cost of living easier.

Many friends already rent property together, and they’re often happy to consider the option of switching to a mortgage, particularly if it means saving cash on rent.

…But There are Challenges to Consider

Of course, there are still challenges to consider if you plan on living with a friend, or even another family member, instead of a romantic partner. Its vital  you work with a solicitor to create a clear cohabitation agreement that includes an outline of what each party is responsible for, and how much equity you both own in the property. Plus, if you ever have a falling out with your friend, there’s always a risk that you could go through a “house splitting” process that’s just as complex as sharing equity in a divorce.

5.    Buying or Renting Property as a Single Person Might be Easier in Some Parts of the UK

So far, all the points we’ve outlined about buying or renting property as a single person in the UK seem pretty doom and gloom. However, it’s not all bad news. The situation for single people is changing – albeit gradually. Some parts of the UK may even be better suited to supporting single people than others.

For instance, according to one report by the Alliance Fund, around 30.2% of all households in the UK are home to just one person. This aligns with the ONS stats about single homeowners.

While single homebuyers might be tempted to find a property in a location with the highest number of one-person households, such as London (51%), Kensington and Chelsea (44%) or Westminster, the cost of buying or renting property in those areas is sky high, way beyond the reach of us ordinary mortals. In all three areas, the average house price is in excess of £900,000, and the average rent is between £1,904 and £2945 per month.

However, there are some locations that have a higher number of single person households, and lower overall bills. For instance, 38.9% of homes in Norfolk city have a single occupant, and local house prices are below the national average at £249,416. Rental costs are lower than average too, at around £865 per month. Other strong contenders include Blackpool, Liverpool, and Barrow-in-Furness, where single-person households make up between 36% and 38% of all houses, with the cost of buying or renting property below the average for both England and Wales.

…Plus, it’s now reported that the Cost Of Living is Starting To Improve Everywhere

With UK house prices falling by around 1.8% in 2023, this could mean the cost of living crisis will eventually begin to subside for both single people and couples. Of course, for real results, we’ll need the governments to invest in supporting lenders, and building new homes.

BUYING OR RENTING PROPERY IN THE UK: THE FACTS

The reality is that 35% of the UK’s population consists entirely of single people, often living on their own. It’s time for mortgage lenders, governments, and landlords to recognise this fact.

Buying or renting property in the UK shouldn’t just be an option if you also happen to be married or have a civil partner. Every person in the UK should have an equal opportunity to have a home of their own, regardless of single status.

The bad news? Buying and renting remains tough for single people in the UK. The good news? The rising voices of single people could start forcing the right government groups and lenders to start changing their policies. As single people become harder to ignore, the opportunities for positive change will continue to grow.