More than half of people who rent a home in the UK are doing so because they cannot afford a deposit to buy a property, new research has found.
There have been several announcements recently about building more affordable homes and research showing that some aspiring first time buyers, particularly in London, cannot afford even the new starter homes.
Now research shows just how many people cannot buy a home because they feel priced out of the housing market which comes in the week that figures from the Halifax show prices rose strongly at the end of 2016.
The survey from Manchester based property investment firm found that 52% living in a rental property said they cannot afford to buy and 25% do not meet the lending criteria for a mortgage.
The findings support the notion that the rising cost of monthly rent and house prices, coupled with low salaries, is prompting an ‘unaffordability’ crisis within the UK and it also means that the rental market will see continued high demand.
However, it also found that 60.7% of respondents were content to rent, citing reasons such as renting suiting their lifestyle and not wanting to be tied to one property or a lengthy mortgage contract.
Just 23.5% claimed to be currently saving for a deposit, suggesting that a large proportion of renters prefer the flexible PRS (Private Rented Sector) lifestyle over a mortgaged home.
‘The results of the poll show that the demand for rental properties nationwide is higher than ever and that renting, contrary to traditional consensus, is an appealing option and active choice for many people in the UK,’ said Andy Phillips, commercial director at Knight Knox.
‘The lack of people saving for a deposit, coupled with the apparent affordability problem, could mean we are seeing a shift towards a PRS centric property landscape, similar to that which has long been a way of life in Germany and wider continental Europe,’ he added.
The poll also found that 75% of renters aged 18 to 24, mostly paid a salary of under £20,000 per annum and unlikely to be able to afford a deposit, were happy with renting but 56% of those aged of 35 to 54 were still unable to afford a deposit. However, the data also indicated that they remain satisfied with their living arrangements, with 42% preferring to rent, saying they were not keen on the hassle or rigidity of purchasing a property.
‘It’s encouraging to learn that the older demographic are equally satisfied with being in a rental property as the younger millennials. It seems that people of all generations are discovering the benefits of more flexible living. Although affordability concerns are undeniable, it looks as if an increasing number of people are making a virtue of the necessity when it comes to renting,’ Phillips pointed out.