98pc of tenants want to buy
Almost half (49%) are expecting to buy in the next five years, a significant increase from the start of the year. In December only a third (36%) of tenants expected to buy in the next five years.
And tenants currently unable to become first-time buyers named the inability to save for a deposit as the biggest stumbling block to homeownership.
More than half (46%) are unable to buy as they can’t save for a deposit, and a growing number of potential first-time buyers (19%) are concerned that rising costs like stamp duty will get in the way – up by a third from just 13% in December 2012.
Concerns over building a deposit are even more apparent in London and the South East where 55% of tenants can’t afford to buy because of high deposit requirements.
The latest England and Wales house price index from LSL shows that house prices in London have risen by 7.1% over the year to June, whilst prices in England and Wales as a whole rose by just 2.2%
David Newne, Director of LSL Property Services, said: “It remains a huge challenge for first-time buyers to purchase property in the capital. House prices are more expensive, and the size of deposit required dwarfs that in the rest of the country.
“It’s the reason why six out of tenants in London can’t afford to buy. And there are further concerns for the London market. Higher legal fees and stamp duty costs are turning further first-timers off buying.”
Transaction costs such as legal fees and stamp duty are more of a concern to tenants in London and the South East, with over a quarter (27%) naming these costs as a key factor blocking them from purchasing property, compared to just 16% in the rest of the UK.
Worries about having enough income for repayments played a lesser role than in the rest of the UK, concerning just 8% of potential first-time buyers.