More people relying on private rental sector
Prohibitive costs are serving as a barrier to many people’s dreams of owning their own home, resulting in an ever-growing reliance on the private rental market, according to new data.
A report from LetBritain indicates that 39% of adults do not have the financial funds needed to purchase a home, and as a result are having to rent. Out of 2,000 adults surveyed, that figure increased to 49% for those based in London, where house prices are usually more expensive.
The saving grace for the UK is the rental market.
The survey highlighted that 61% of renters lay the blame for their predicament firmly at the feet of the Government, insisting that they do not believe the existing regime is providing sufficient support for new buyers.
No less than 64% of those questioned felt that conditions are likely to deteriorate for tenants over the coming five years.
It seems that, in turn, has fuelled buy-to-let ambitions. 27% of those surveyed intend to invest in a cheaper property, in another part of the country, as a means to increasing their own income.
Fareed Nabir, CEO of LetBritain, commented:
“With more and more people across the UK coming to rely on the private rental sector, the results of the research are concerning.
“Whilst many renters are working hard to enter the property market, they clearly do not feel the government understands the issues faced by tenants.
“Interestingly, the findings show that Generation Rent is now increasingly looking to buy properties outside of their chosen place of residence so they can still get onto the property ladder without having to sacrifice the location or quality of the property they wish to live in.”
Andrew Turner, chief executive for Commercial Trust, said:
“The present economic climate is a challenging one for people looking to enter the homeownership market for the first time, with fewer people having the spending power to climb onto the property market.
“This underlines the unequivocal need for properties offered by buy-to-let landlords, ensuring there are sufficient homes for people to rent, until they have the initial capital to begin the home ownership process. It may be that, given the prevailing financial conditions, it simply takes longer for those in the rental sector to qualify for mortgage affordability conditions and that of course puts further onus on the immediate need for more private landlords.
“The entrepreneurial spirit taken by renters, who invest in buy-to-let in cheaper areas, is an admirable strategy for tackling the challenges they face getting onto the property ladder. We work with lenders who welcome first time landlords who are also first time buyers, so this is certainly a viable option of opportunity and one we frequently investigate for clients.”
This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.