One third of renters planning to buy in 2014 – a quarter of those prompted by Help to Buy


Published : 17th December 2013

News

*One third (32%) of renters in the UK are planning to buy their first home in 2014, a 6% increase compared with 2012

*Nearly a quarter (24%) of those say they are looking to buy as a direct result of phase two of Help to Buy or have brought forward their plans to buy because of it

*Renters in London and the South East are most keen to move; North East and Scotland are least likely

*Of those renting, over half (58%) are ‘trapped renters’ who would like to buy but can’t afford to

*More landlords due to buy-to-let mortgage availability combined with fewer tenants as some become first-time buyers looks set to create a flat picture for both demand and rental prices in 2014

The increased number of renters longing to get their first step on the housing ladder next year could see rental prices stay flat for tenants staying put, Rightmove predicts today.

Nearly a quarter of renters (24%) who are planning to buy say they have been prompted to do so by the introduction of phase two of the Help to Buy scheme. One in five people (18%) currently living with their parents but planning to make the move to home ownership have also been influenced by the scheme.

Rightmove’s Consumer Confidence Survey found that for those planning to remain in rented accommodation in 2014 the biggest reason is not being able to afford to buy (58%). Over one in ten (13%) are not interested in buying as renting suits them and 28% would like to buy eventually, but not right now.

Across the UK, the top three areas where renters are looking to buy next year are London (44%), the South East (33%) and Yorkshire (32%). The bottom three places are the North East (25%), Scotland (26%) and the East Midlands (27%).

Miles Shipside, Rightmove director and housing market analyst comments: “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.

“With there being an increase in supply of property to rent, it’s important that landlords improve the standard of their stock to attract the best tenants as there is more choice of property to rent in some parts of the country. In the past three years rental prices have increased by a total of 7.6%, and the fact it has slowed to 1.4% within the past year is an indication that landlords will have to try harder to get the best returns. More landlords and the increase in supply due to buy-to-let mortgage availability is likely to keep rental price growth in check in 2014. However, it could be that we see buoyant rental and sales markets at the same time as a result of the housing shortage of the last ten years, which won’t be solved by a few months of Help to Buy.”

*Update provide by Rightmove 17/12/13