Renters ‘love affair’ with homeownership as strong as ever
Despite the travails of the property market post-credit crunch, Britain’s desire to own a roof, rather than rent one, remains stoically undimmed.
A remarkable 96% of those currently in rented accommodation still ‘dream of owning a home someday’ and, despite ongoing issues of affordability, access to credit and difficulties raising a deposit, 70% say ‘they will never stop trying’ to make their dream a reality.
Miles Shipside, Rightmove director and housing market analyst comments:
“The traditional British love affair with property ownership seems as strong as ever and today’s tenants are so committed to realising their dream of homeownership that most say they’ll never concede defeat. The tricky years since the run on Northern Rock have not deterred them – in fact, they may feel encouraged by a more confident and optimistic mood in the market after years of famine and frustration. Today’s tenants are certainly hungry to be paying off their own mortgage rather than their landlord’s”.
The Help to Buy scheme, which widens from just new build property to include all existing homes under £600,000 in January 2014, offers hope to those with just 5% deposit. However, Rightmove’s latest research also shows that just 15% of potential buyers state their deposit saving goal ‘is on course’, raising the prospect of a substantial majority missing out on the proposed three year window of the scheme.
Shipside adds:
“For those dreaming of owning their own home, Help to Buy could perhaps play the role of dream-maker. While it’s tough to save, especially when you’re paying rent and it’s rising, the window for homeownership will be flung open again. It will not be a pre-credit-crunch free for all, but for some that have been unable to reach the higher deposit criteria, it could be a real leg up onto the property ladder”.
Rightmove’s research also shows record levels of ‘trapped renters’ – tenants who would like to buy but can’t afford to – has risen from 56% a year ago to 60%. While lettings agents increasingly report ‘property purchase’ as the reason tenants give for serving notice, the pipeline of new tenants and the existing trapped renters who cannot ‘escape to buy’ means that a higher proportion are trapped. More than three in ten (31%) of today’s trapped renters actually owned previously – yesterday’s homeowners but today’s ‘regressive renters’.
Shipside observes:
“Even though some agents are reporting an increase in those buying and escaping the rental trap, the growing number of new households and former homeowners returned to the rental sector keeps producing new tenants. In spite of buying looking increasingly attractive as the costs of renting continue to rise, saving a deposit continues to get harder. For many of those trapped in rented accommodation and dreaming of escape, it’s a nightmare scenario.”
