Rightmove has published a new report that suggests the number of tenants paying for rental accommodation who feel “trapped” because they are unable to afford to buy a property has reached the highest level for nearly three years when Rightmove began its quarterly rental market report.
This is despite new government initiatives designed to make it easier for first-time buyers to purchase their first property, such as the NewBuy and Help to Buy schemes and the Funding for Lending Scheme (FLS).
Rightmove asked over 3,200 people and found that 60 per cent of respondents say they can’t afford to buy a property, up from 58 per cent three months ago.
The data points to evidence that recent improvements in the economy and the government schemes have helped to push up house prices taking property ownership out of the reach of more people in rental accommodation.
Last week, Nationwide reported in its July house price index that house prices were up by the highest annual rate in three years, up by 3.9 per cent to an average of £170,825.
Rightmove said that the number of people in rented accommodation had increased as former homeowners were forced out of their property for various reasons.
Despite the difficult experiences that many former homeowners have had, 96 per cent of current renters still hope to own their own home at some point in the future.
Miles Shipside, director of Rightmove, said: “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.”
However, raising the necessary deposit is proving to be a major stumbling block for many aspiring homeowners. Rightmove reports that with inflation close to three per cent, wage increases low and savings rates falling dramatically, just 15 per cent of would-be homeowners are on course to save up the required deposit.
Rental costs have been increasing because of the lack of supply of affordable housing and the fact that so many people cannot afford to buy a home.
Official figures from the Office for National Statistics shows that between 2001 and 2011, home ownership fell from 68 per cent of households to 64 per cent and the number of households renting from a private landlord went up to 3.6 million households, 15 per cent, from nine per cent in 2001.
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