Tenants demand their own Minister as more are forced to rent for longer
- More than 60% of renters favour the appointment of a Minister with specific responsibility for tenants
- Tenants forced to defer purchasing their first property in increasing numbers, with only 11% expecting to buy by the end of the year, down from 13% a year ago
- However, the number of completed first-time buyer transactions grows 3% year-on-year in April
Tenants would overwhelmingly support appointing a Government Minister whose sole responsibility is tenancy issues, according to the latest First Time Buyer Opinion Barometer from Your Move and Reeds Rains.
When asked if they thought there should be a Minister with specific responsibility for tenants, 60.2% of respondents said ‘yes’, compared to only 14.9% who thought it was a bad idea.
The survey also reveals that renting is becoming a longer-term option for increasing numbers of people. When tenants were asked at what point in time they expect to become home-owners, only 11.2% now feel they will be able to get onto the ladder within the next year from April 2015, down from 13.4% in April 2014. Equally, 13.1% reply that they will probably never be able to own their own home, up from 11.0% twelve months ago.
Getting the necessary money together for a deposit is by far the biggest bar to tenants putting a foot on the property ladder, with 70.8% citing it as the reason behind them choosing to continue renting.
Adrian Gill, Director of estate agents Your Move and Reeds Rains, comments: “Tenants feel that their particular circumstance deserves special representation at the heart of government.
“The younger generation have been disproportionately disadvantaged by the recession, with many stuck in lower paid roles, unable to progress their careers at the same pace as the previous generation. At the same time, savings rates have been stuck in the doldrums, meaning any money they have been able to put aside hasn’t been working hard for them. Saving for a deposit has become much more arduous. Rising prices have also pushed up the amount many need to save in the first place, adding insult to injury. This means many tenants trapped in rented homes during the recovery are still playing catch-up.
“What will be interesting to monitor is whether such an initiative would cause a drastic change in the way we view renting in the UK. If the flexibility of renting, which most people see as a bonus, can be combined with the stability and reassurance that a Minister for Tenants could provide, it could create a golden formula that makes renting a better long-term, as well as short-term, option for many individuals and families.”
THE ASPIRATION GAP
Homeownership remains the desired goal for the vast majority of people at some point in their lives. However, a number of economic factors are inhibiting many from moving any time soon.
When asked if they would like to own their own home if all financial constraints were discarded, 93.4% of tenants responded positively, a figure hardly changed from previous months (94.1% in February and 91.1% in December).
However, when asked when they could foresee themselves moving into their first property, tenants’ replies were more varied. Only 11.2% are confident of home-owning by the year’s end, while 48.0% stipulate it could take as many as five years, and a further 27.5% are completely unable to give timescales.
Lack of available finances was cited as the key reason preventing people from buying, with 70% of respondents claiming that the inability to put down a deposit had hindered them from becoming a first-time buyer. Moreover, over 60% of first-time buyers admit to having to rely on some form of financial support when buying their first property.
Tenants are increasingly willing to relocate far afield to get a first foot on the property ladder, with 39.5% of respondents saying that they would be willing to move over 10 miles away from their place of work to become home-owners.
Adrian Gill, Director of estate agents Your Move and Reeds Rains, explains: “Vast numbers of tenants possess the will to own their first home, but not yet the means.
“For many, homeownership is more of an aspiration than a concrete objective. Yet it may not be as difficult a dream to realise as many believe. Yes, rising house prices – and this month is no different in that sense – mean that the requisite mortgage becomes bigger, pushing up the amount of deposit a first-time buyer needs to put down. Yet there are a number of government schemes in place to ameliorate that problem, both Help-to-Buy schemes to start with. The uptake of these has been relatively low, suggesting that if tenants got more clued-up about the help available, that aspiration would be more likely to become an attainment.”
FIRST-TIME BUYER NUMBERS GROW 11% IN APRIL
There were 25,600 first-time buyer completions in April 2015, 11.3% higher than 23,000 in March and 33.3% higher than three months ago.
Meanwhile, the average purchase price of first-time buyer properties was £158,009 in April, 10.6% higher than a year ago. First-time buyer deposits averaged £25,534 in April, 8.7% more than a year before, despite additional support for lower-deposit borrowers in the form of Help to Buy.
Adrian Gill continues: “April has seen the market continuing to fire on all cylinders, with all indicators showing strong growth. Predictions about a slow-down, or even sudden halt, to completed transactions due to lack of housing appropriate for first-time buyers have proven premature for now. However, the inexorable rise of first-time buyer house prices does suggest that the demand for such properties is still outstripping supply and the Government’s reticence to fully overhaul the planning system will not alleviate that crush.”
The average purchase price paid by first-time buyers in London was £306,514 in the three months to April 2015, while Northern Ireland was the cheapest region for first-time buyers at an average of £102,247.
* This is the total number of FTBs in the three months to April 2015. Based on CML regional data (released 25th April 2015) on the number of FTBs in Q4 2014 – grossed up to reflect growth in FTBs recorded by Your Move and Reeds Rains between Q4 2014 and the three months to April 2015.