editor posted on December 01, 2011 01:50
More than half of all tenants (53%) expect rents to be higher in a year’s time.
Almost the same proportion (55%) say they feel trapped because they would like to buy but cannot afford to.
According to the property portal Rightmove, over a quarter (27%) of these ‘trapped’ renters are aged over 40, and over one-third (39%) of all ‘trapped’ tenants expect still to be renting in three years’ time. That proportion is up from 32% when Rightmove did its rental survey three years ago.
The high age of many of the 'trapped' renters suggests that when they do finally buy their first property, they will be committing to paying off a mortgage until well into pensionable age.
Miles Shipside, Director of Rightmove, said: “The momentum of the runaway rental train shows little sign of slowing.
“New tenants are still looking to clamber aboard in their search and are finding a dwindling number of places to rent as existing tenants have limited exit opportunities and stay put.
“The rental journey is the only real option for many, and the majority seem resigned to having to pay more. It has to run out of steam soon as the failure of wages to keep pace with rising living costs increases the pressure on tenants’ disposable incomes.”
However, the latest Rightmove survey paints a happy picture for landlords, with 41% saying that attractive rents are their main reason for investing in property, and 39% saying that the poor performance of other investment options is their reason for buying bricks and mortar. Just one in five claim to be motivated by capital appreciation.
The survey was based on 4,430 responses.
Rob Wellstead, Managing Director of Lenwell said: “Given what has been happening in the rental market over the last two years and with no signs of it becoming easier to buy, it is not surprising to see so many people taking an upward only view on rents and regarding themselves as “trapped” within the rental market.
I expect the pace of the “runaway rental train” to slow as economic factors take greater hold and the Government is likely to try and bring forward measures to enable greater levels of home ownership to be restored.
The next twelve months however look to be buoyant again for the rental market and landlords should continue to see high demand and good yields being achieved.”