Two Thirds Of Tenants ‘Unlikely To Buy In Next Five Years’
Published: 9 June 2010 By MoneyHighStreet Staff Leave a Comment
Two thirds of tenants living in privately renter housing believe that they will be unlikely to buy their own home with in nth next five years.
Research by Kensignton, a mortgage lender, indicates that most tenants are either unable, or unwilling, to buy their own property within the next five years.
The difficulties in raising sufficient capital for a deposit deters many tenants, however this problem seems worse for older renters as around 75% of those in the 35-44 year old age group, which is the average age to become a first time buyer, are pessimistic about home ownership.
As demand for private rental property looks set to increase, this sector will become more important, advises Keith Street, Head of Kensington, who said:
“It is vital that there is the housing stock available to meet this demand and we – that is both lenders and the Government – need to encourage landlords to build and maintain portfolios for the long term so that tenants continue to have a choice of good quality, affordable rental accommodation to meet their housing requirements.”
Increases in capital gains tax could reduce the supply of rental properties as some landlords may try and cash in their gains before CGT rises come into force. Changes to lending practices as the Nationwide Building Society is doing, may also reduce the stock of rental housing available, at a time when most tenants look set to continue renting for the foreseeable future.
In contrast to some other lenders, Kensington is actively entering the buy to let sector and has launched two buy to let products with up to 75% LTVs. Rates are fixed for two years at 5.69% and three years at 6.19%. These mortgages are targeted at experienced landlords, with at least two buy to let properties, that are looking to expand their portfolios.