First Time Buyers (FTB’s) are still feeling the brunt of the economic uncertainty, as many can’t stump up large deposits to buy their first home.
The lack of suitable mortgage products and the size of deposits demanded by banks have been cited as reasons for the UK fast becoming a rental nation.
Figures published by the Communities and Local Government department (CLG), show the number of tenants in the UK’s Private Rental Sector, (PRS), has risen from 2.15 million in 2004 to 3.35 million in 2010 – An increase of 55% since 2004
In contrast, over the same time frame the number of owner-occupiers fell from 14.54 million to 14.52 million.
Rents have risen steadily as demand has increased, with more people are being forced to rent while trying to save a deposit.
According to recent Government figures…
• In 2010 the average council rent was £75 per week
• PRS tenants paid an average of £155 per week
Over two thirds of the 21.6 million households in England are privately owned their homes last year, 17% were social renters and 16% were private renters.
Mike Farley, the head of one of the UK’s biggest house builders Persimmon, said “Most people still want to own their own home and that it is cheaper to buy than rent in most parts of the country. It’s not affordability that’s the issue, it’s the fact that first-time buyers haven’t got the deposit.”
SpareRoom.co.uk director Matt Hutchinson said: “In a recent survey of more than 10,000 flat and house sharers we discovered that 12% of Britons never plan to own a property while another 12% estimated it would take them more than a decade before they could afford to climb on the property ladder, which suggests that the demand for rental property could reach crisis point in the next few years. Even though interest rates are at a historic low, very few first-time buyers are in a position to buy and take advantage of attractive mortgage deals, and with the cost of living spiralling out of control, making it impossible to put money away for a deposit, this is likely to put tremendous strain on the rental market.”
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