As the clock struck midnight on December 31st, many renters in the UK will have made a resolution to enter the property market this year. Indeed, in a move that could see rental prices stay flat for landlords in 2014, more and more tenants are looking to buy their first home, according to Rightmove. Figures show that 44 per cent of people in London, 33 per cent of renters in the south-east, 32 per cent in Yorkshire, 25 per cent in the north-east, 26 per cent in Scotland and 27 per cent in the East Midlands intend to try home ownership this year.
Part of the reason behind this move is the introduction of phase two of the Help to Buy scheme. Twenty-four per cent of renters that plan to buy this year say they have been prompted to do so by the government initiative. One in five that are currently living with their parents but intend to get on the property ladder this year also say they have been swayed by the scheme.
Help to Buy is certainly giving many first-time buyers the confidence they need, but there are still barriers to home ownership and renting remains attractive. Rightmove's Consumer Confidence Survey showed that of those planning to remain in the rented sector, 58 per cent intend to do so because they still simply can't afford to buy. One in ten aren't interested in home ownership at all, claiming being a tenant suits them. Meanwhile, 28 per cent say they would like to buy eventually but not right now.
Miles Shipside, Rightmove director and housing market analyst, said: "More renters look set to buy in 2014 but saving a deposit still requires time and commitment, meaning that overall tenant demand is unlikely to change much. It could ease a little in 2015 but the reality is that many first-time buyers will still be priced out of buying, especially with increased competition from buy-to-let investors attracted by solid rental returns and the possibility of increasing capital values."
Is Help to Buy really "giving first-time buyers confidence" or "leading them up the garden path"? Decide for yourself in this article covering the not so well publicised parts of the scheme.
- Wednesday 08 January 2014