Tenants losing faith in government

Mortgage Introducer

October 30, 2015

In September just 17% of tenants were optimistic about the government taking action to tackle the housing crisis, with the remaining 83% feeling either ambivalent or cynical.

In order to keep house price rises in check the UK would need to build 250,000 per year as set by the Barker Review of Housing Supply in 2004, but annual housebuilding stands at around half that number.

In September 93% of renters wanted to own, but just 6% reckoned they would be able to buy in the next 12 months. Reflecting this gulf, nearly half (44%) of tenants saw the lack of affordable homes for first-time buyers as the most significant problem facing the UK.

Tenants have tended to rely on government assistance to get on the housing ladder, as almost half (46%) of first-time buyers said relatives helped them with deposit costs. Government schemes proved less popular, as only 6% used the Help to Buy Mortgage Guarantee and 3% used the Equity Loan Scheme.

Adrian Gill, director of estate agents Your Move and Reeds Rains, said: “As the number of renters wishing to become homeowners keeps mounting, the lack of new and affordable homes to meet this demand is ever more apparent.

“Those hoping to hop on the ladder face an unappealing choice between purchasing a smaller home further from amenities and the workplace – or remaining in rented accommodation indefinitely, waiting for one-day when their take-home pay might begin to match rising property prices.”

He added: “Those needing help to get onto the property ladder are increasingly favouring family fortunes over state support. Getting help from relatives when it comes to paying deposit costs or guaranteeing a mortgage can be more convenient and less time-consuming than seeking state assistance.

“That said, not everyone has a family fortune they can rely on to help them get a foot on the ladder, so government schemes like Help to Buy remain a useful part of keeping the housing market accessible. The problem is that not enough first-time buyers are aware of the existence of such schemes.

“So, instead of creating more stimulus packages for first-time buyers, the Government should perhaps double-down on the great ones they already have – but make them better known, more widely available, and more user-friendly. That way, even those without rich relatives have the opportunity to fulfil their dreams of homeownership.”

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