These days there are many people in the UK who are renting a home rather than deciding to buy their own property, and whilst this is damaging for the property market in the UK there are a number of reasons why many non-homeowners are continuing to rent and are not getting onto the property ladder.

The fact that so many people are now deciding to rent has pushed up the average rent in the UK over recent months, and this has been coupled with the fact that a rising number of landlords have been selling up, resulting in lower supply of rental properties and higher demand.

The mortgage market has been difficult for some time, with many people unable to access affordable mortgages, and this is particularly true for first time buyers who may have wanted to get onto the property ladder but have been unable to get the necessary finance from lenders.

Another of the reasons that many people are not buying property at the moment is because they cannot afford the deposit that is needed to get a mortgage from most lenders, as this has soared over the past couple of years with many demanding a minimum deposit of at least 15 to 20 percent of the property value in order to offer a mortgage.

For many the financial climate and economic fragility simply isn’t stable enough for them to make such a huge commitment as purchasing a property, and this is yet another reason behind the rising number of non-homeowners that are deciding to rent rather than try and get onto the property ladder. Whilst the recession may be officially over many are still in fear of losing hours at work or even losing their jobs, with the coalition government’s cutbacks in the public sector likely to produce job losses both in the public and private sectors, and this has made many too wary of committing to something as huge as a mortgage loan.

The good news is that whilst the lack of buyers in the property market may be driving up rental prices due to increased demand the same situation is also helping to drive down the cost of purchasing a property because of the lack of demand amongst buyers coupled with an increase in people trying to sell their homes, and recent reports have indicated that asking prices have now fallen for the third consecutive month, which is good news for those that do decide to buy.

One Comment

1. LS1 February 22nd, 2011 5:15 pm :

   Banks and building societies are not lending money as freely as they were before which has steered many into the direction of the rental property market. The sluggish economy makes the prospect of being accepted for a loan or mortgage less likely for the foreseeable future. The outlook is little more than bleak for a considerable number of families and businesses with the looming threat of bankruptcy or redundancy and cuts to welfare spending. For many young people the chance of buying property has diminished in recent years and renting is a necessity. For those who are in a slightly better fiscal position, renting should be considered as a serious option until more favourable economic circumstances arise.

   I personally am happy to rent in Leeds despite my advancing years. The pressure to buy a house and land yourself in enormous debt seems, to me, an irrrational choice.

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