Headline house price data may look steady, but Skipton Building Society says the underlying affordability picture remains far tougher than those numbers suggest. For landlords, that is not just a first-time buyer story. It points to continued demand from renters who still cannot bridge the gap into ownership.
Only a small share of buyers can afford to buy locally
Skipton’s Home Affordability Index says just 12.1 percent of potential first-time buyers can afford to purchase in their local area. It also found around 40 percent are already spending more than 45 percent of income on housing costs, leaving little scope to build a deposit.
The regional split is just as important. Skipton said typical first-time buyer deposits in London are equivalent to about 140 percent of household income – roughly double the level seen in northern regions. That means even where headline price growth looks modest, the real barrier is still the upfront cash needed to get moving.
For landlords, this helps explain why tenant demand does not ease simply because mortgage rates stabilise or prices stop accelerating. A renter can see calmer housing data and still be years away from a deposit. That gap keeps pressure on the private rented sector, particularly in areas where wages have not caught up with housing costs.
Landlord Knowledge has recently reported that student debt can strip thousands from annual deposit-saving capacity, while broader affordability measures still show house prices well above earnings in many markets. Skipton’s latest figures reinforce that this is a structural squeeze, not a short-term wobble.
Why this matters to rental demand and landlord strategy
There is a landlord-first angle here that often gets missed. If access to ownership stays tight, many tenants will remain in the rental market for longer, but that does not automatically mean landlords gain pricing power. Tenants stretched by rent and living costs have less room to absorb increases, even when demand is solid.
That creates a more selective market. Demand can stay high at the headline level while affordability weakens at household level. Landlords with realistic pricing, well-presented stock and lower voids should still perform strongly. Those relying on repeated rent jumps to carry higher borrowing or compliance costs may find tenants are close to the limit.
Stable prices do not mean healthy affordability
This follows Landlord Knowledge’s earlier report on the cash barriers facing would-be buyers, which showed that deposit formation remains one of the biggest constraints in the market. The latest Skipton data suggests that problem is not easing fast enough to materially reduce rental demand.
A practical warning for landlords is that strong tenant demand and weak tenant affordability can exist at the same time. That is why occupancy may hold up even as arrears risk, rent sensitivity and negotiation on renewals all become more common.
What this means for landlords
- If you’re reviewing rents: local demand may still be strong, but test affordability against real tenant budgets rather than headline market averages.
- Watch for: regions where deposit barriers stay high – those markets may keep renters in place for longer.
- Bottom line: weaker buying affordability is still supporting rental demand, but it does not give landlords unlimited room to raise rents.
Editor’s view
Landlords should stop assuming stable house prices mean renters are about to buy again in large numbers. The ownership ladder is still too expensive for many households, and that keeps the rental market busy even when confidence looks shaky.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 5 May 2026
Sources: Skipton Group Home Affordability Index
Related reading: Student loans cost aspiring buyers £2,000 a year in deposit savings
