First-Time Buyers Booming, But Many Feel Trapped in Rental Market

Monday, 19 August 2013

The improvements in the housing market may be good news for homeowners, but it’s a step backwards for those currently saving for a mortgage. A recent survey by property website Rightmove shows that nearly two thirds of Britain’s tenants feel that they’re trapped and can’t afford to get a foot on the property ladder - an increase of 8% since the website started surveying tenants in 2011.

Although 9 out of 10 tenants plan on buying a house one day, it seems that many of them probably won’t get the chance to decorate, browse home insurance quotes, or take on the responsibilities of a homeowner for quite some time.

According to The Guardian, ‘Generation Rent’ are the victims of increasing rental costs. Combined with the revived property market, it’s becoming more difficult to save enough money for a deposit. Many of the surveyed tenants have owned property before, but were forced to sell during the crisis. Now they’ve found that they’re priced out of the market.

Of course, it’s not all doom and gloom. The BBC has reported statistics from the Council of Mortgage Lenders that show the number of first-time buyers is at a five-and-a-half year high. This can be attributed to government schemes such as Funding for Lending, which has been making mortgages cheaper and easier to get since last August.

Miles Shipside, Righmove’s Director, points out that although many first-time buyers are getting a foot on the property ladder, there are still more people entering the rental sector with no chance of escaping: “The growing number of new households and former homeowners returned to the rental sector keeps producing new tenants.”

Although house prices are set to rise next year, the Housing Minister Mike Prisk believes that it will become easier for first-time buyers to escape their rental homes due to new government schemes: “The Help to Buy mortgage guarantee scheme from January will further increase the availability of mortgages to otherwise creditworthy first-time buyers with small deposits."

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