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Half of tenants trapped in rental sector

Half of tenants trapped in rental sector

Category: Buy To Let

Updated: 25/10/2011
First Published: 25/10/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Over half of tenants in the UK are 'trapped' in the rental sector, wanting to buy a house but unable to afford to, new research has revealed.

According to Rightmove, 55% of renters have been forced to put their property ownership dreams on hold because of a lack of funds.

Worryingly, over a quarter (27%) of those who claim to be trapped are over the age of 40, and face the challenge of either trying to pay off a reduced mortgage term or else become an 'OAP mortgagee' should they eventually raise the money to buy.

Meanwhile, the gap between rental demand and supply has continued to widen further.

While the number of people searching for somewhere to rent continues to reach new highs, the number of properties available to rent has continued to dwindle.

The supply of new buy-to-let homes has remained muted during the last quarter, while tenants scared they might not find a new place to rent are choosing to stay in their properties longer.

As a consequence of the growing disparity between supply and demand, the forecasts are that rents are set to rise even further, with over half of tenants anticipating their landlords will be charging them more in 12 months' time.

"The momentum of the runaway rental train shows little sign of slowing," said Miles Shipside, director of Rightmove.

"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."

The latest data from the British Bankers' Association (BBA) suggests that landlords are attempting to take advantage of the boom times which have recently characterised the buy-to-let market.

According to the UK 's high street banks, mortgage activity increased last month thanks mainly to growth in the buy-to-let mortgage market.

"A modest stimulus to gross mortgage lending is coming from the buy-to-let sector as rental yields continue to improve," said David Dooks, BBS statistics director.

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