Demand for rented property to rise AGAIN as tenants put off home-buying

Growing numbers of tenants are having to rely on the PRS for longer as they despair of ever being able to save for a deposit to buy their own home.

Paragon Bank’s survey of more than 2,000 private renters found that just over one third (35%) are actively saving to buy a home, with the majority of these (73%) in the process of saving for a deposit.

But over half of these aspirational home buyers (56%) expressed reduced optimism in their capacity to save due to economic pressures, either saying that they are only slightly confident or not confident at all.

While the majority – four in 10 – predict being ready to buy in the next one to two years, a similar proportion (44%) of those who are not confident in raising the funds for a deposit expect to buy a home within three and five years.

Over a quarter (28%) of those who are confident in their deposit-raising ability expect to buy a home within the next six to 12 months, falling to one in 10 among those who feel their capability to save will be compromised.

Paragon’s MD for mortgages, Richard Rowntree (pictured), says as would-be home buyers stay in rented properties for longer, it places further pressure on the supply of rented homes which is already surpassed by demand, exacerbating rising rents and limiting choice for tenants.

He adds: “This helps to reinforce my view that different housing tenures are inextricably linked, with the population moving between them influenced by their needs at the time. As a result, each tenure should be viewed equally, and policy should reflect this to minimise any barriers to much needed investment.”