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Soaring house prices and bills keep renters off property ladder


10-09-2014


Soaring house prices and bills keep renters off property ladder

THERE has been a sharp increase in the number of renters who think they will never be able to afford their own property, new research has revealed.

Soaring house prices and bills keep renters off property ladder

More people than before now expect to rent their entire life [GETTY]

A study carried out by flatshare website SpareRoom.co.uk shows that almost a fifth of tenants expect never to own their own homes, an increase of 50 per cent on three years ago.

Rising rents, increasing house prices and a lack of mortgage availability have all been blamed for the lack of optimism among renters.

SpareRoom.co.uk found that almost a quarter of tenants are now forced to spend at least half of their salaries on rent.

Three in 10 said that they now considered their rent bills to be "unaffordable", the company added.

 

For nearly one in five of the UK's growing population of renters, aspirations of home ownership are slipping away

Matt Hutchinson, SpareRoom.co.uk director


And the latest official figures from the Land Registry show that house prices across the UK have returned to near their 2007 peak: the typical home now being worth 178,000, rising to more than 500,000 in London.

SpareRoom.co.uk director, Matt Hutchinson said: "For nearly one in five of the UK's growing population of renters, aspirations of home ownership are slipping away.

"House price rises appear to be unstoppable now, with a typical London property clearing the 500,000 mark and prices for most first-time buyers rising faster than prices for owner-occupiers.

"Coupled with rising rents and eroding savings, it's not at all surprising that such a significant proportion of renters have resigned themselves to never owning their own homes."

Hutchison added: "Attitudes to renting for life will have to change as, like it or not, we are heading towards a European approach towards property, where so-called 'lifestyle tenants' are the norm.

"Given Britain's love-affair with property ownership, this is going to be a major cultural shift."

One of the biggest obstacles to long-term renting in the UK is thought to be a shortage in the number of landlords willing to sign tenants up for more than a year or two at a time.

However, the Government has recently encouraged lenders to offer buy-to-let mortgages which allow longer tenancies. Paragon, for example, has just launched a loan with more flexible terms and conditions so landlords can sign tenants up for as long as three years at a time.

In a separate study Santander bank found that would-be buyers say they will go to great lengths to get on the property ladder.

More than a million people said they would consider emigrating if it meant they could afford their own home, while others said they would happily cut down on extra spending to save a deposit.

A fifth explained that they would go without luxuries such as holidays and new cars while the same proportion were ready to face a lower standard of living, for example by buying cheaper food, in order to help them save.

Miguel Sard, head of Santander Mortgages, said: "With living costs rising ahead of salaries for many people, raising a deposit remains one of the big concerns for first-time buyers, especially for younger generations.

"However, there are options available to suit most budgets, so it is crucial prospective buyers shop around for the best deals and get sound advice in terms of properties and mortgages."

www.express.co.uk

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