HOPEFUL first time home buyers are trapped in an increasingly expensive rental market, according to a series of separate studies released yesterday and today.
The cost of renting a home shot up by 4.3 per cent in the year to May-July, with the Royal Institution of Chartered Surveyors (RICS) explaining that “many would-be buyers continue to find themselves locked out of the sales market”.
Ballooning rents are “partly down to the problem of the scarcity of mortgage finance and the large deposits required by lenders,” RICS’s Peter Bolton King said today.
“These barriers to home ownership need to be addressed alongside the shortage of new stock coming to the market,” he added.
His claims echoed findings in a separate survey published this morning, by the e.surv group of surveyors. E.surv said that fewer than one in 10 loans made in July were granted to buyers with a deposit under 15 per cent, showing that most were to cash-rich buyers.
“There were just 11,399 loans for purchase of property worth up to £125,000 – [which are] typical first-time buyer homes,” e.surv added. This totals less than 23 per cent of house purchases in the month.
And another survey, released yesterday, showed that buy-to-let lending rose by five per cent in the second quarter of the year, as landlords look to cash in on higher rental prices.
“The housing market is stacked against first time buyers and there appears to be no end in sight,” complained Duncan Stott of the Priced Out campaign group. “High rents are squeezing young adults’ incomes, leaving them little room to save for a deposit. Not only is this a vicious cycle, it is also underpinning house prices which remain well out of the reach of first time buyers.”