Crunch time for home hunters who can’t buy or rentMake Text Bigger
Britain is careering towards a housing crunch as an increasing number of home hunters cannot afford to rent or buy a property.
A shortage of homes to rent is pushing up rents at the same time as worsening finances create an underclass of consumers who do not have the cash to buy while their poor credit rating pushes them down the queue of renters.
Rents in some neighbourhoods are so high that previously affordable homes are not beyond the means of many, confirms a quarterly residential letting survey by the Royal Institution of Chartered Surveyors.
Rents will continue to rise
Instructions for new rental homes are up 6%, but still far short of enough to meet demand.
RICS says tenants are staying in their rental homes for longer and landlords are not selling their buy to let properties when rentals end.
A third of letting agents quizzed by RICS predict rents will continue to go up – especially in London and the south east, the midlands, and north.
James Scott-Lee, a RICS spokesman, said: “Although we are beginning to see more mortgages aimed at first-time buyers, many potential homeowners are still restricted from getting a foot on the property ladder, leading to increased demand in an already oversubscribed rental market. There has been a small uplift in supply, but the imbalance between demand and availability can only mean rents will continue to rise.”
Northsouth rental gulf
The RICs study continues to highlight a growing rental gulf between London and the south east and the rest of the country.
Although average rents increased nationwide, they are rising at a faster rate in and around the capital.
Demand is also strong nationwide, but is picking up faster in the Midlands and Wales.
The findings also reveal tenants opt for houses rather than flats. Three out of four tenants are private lets, with the rest comprising students (5%), corporate lets (7%) and social housing (8%).
Most landlords are buy to let investors (74%), followed by financial institutions (9%), property companies (6%) with ‘others’ making up the rest.
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