Fewer mortgage applications forecast for 2012 as more people rent
Haart Residential Lettings are forecasting an increase in the number of people who will choose to become tenants and rent, rather than take on a mortgage and buy over the next few years.
Andrew Benn, Managing Director of Haart Residential Lettings explains "We are seeing a real culture change in the UK towards letting with more people than ever before prepared to make a lifestyle choice and rent. And this isn't just restricted to people between the ages of 18-30".
"This isn't to say that they don't want to buy their own home. It is more that with the continued economic uncertainty, they are delaying that decision, and the associated long-term financial commitment of a mortgage, until there is greater certainty in the country."
The volume of applicants who have registered with Haart in the last three months, is up over 10 per cent, and is forecast to grow by a similar amount in 2012. The trend towards renting has also increased pressure on the availability of rental property, some Haart branches are seeing up to 10 applicants per property.
There has also been an increase in enquiries from prospective landlords who are looking at buy to let as an investment. The latest RICS residential lettings survey reports rising yields on rental properties as a result of increased tenant demand.
RICS members advise that tenants are turning to the rental sector because they view taking on a mortgage as too much of a risk.
RICS spokesperson James Scott-Lee said: “The disappointing economic message communicated by the Chancellor in his Autumn Statement and the prospect of further job losses in some sectors and areas over those previously envisaged is likely to continue to underpin the residential lettings market in the near term.”
David Miles, an external member of the Bank of England's monetary policy committee, has said that the main problem in the face of cautious lending is equity. He added "I do not believe that the housing market and the mortgage market will get back to where we were in the years leading up to the crisis. I also do not think we should regret that."
