Trend for long-term renting set to rise

February 7, 2017

Posted by Sarah Marshall

More people will be renting long-term in the future, a survey has shown. This trend for renting rather than buying will accelerate, because property prices continue to rise much faster than wage increases, which means buying is no longer an option for many people.

According to a survey of 1,000 tenants by the Deposit Protection Service, two in five renters are not looking to buy property and intend to rent for a long time. Another survey shows more than half of renters do not think they can ever afford to get a foot on the property ladder. Raising a deposit is seen as the biggest obstacle. This research by property investment consultancy, Knight Knox, revealed just 23 per cent of renters are saving for a deposit. Many have little hope of being able to save sufficient funds for a deposit unless their circumstances change. The study, which questioned 2,000 UK renters, suggests many are resigned to the fact that owning a home is not possible.

Knight Knox commercial director, Andy Phillips, said the gap between housing prices and salaries means many people, who are renting at the moment, accept that this is going to be a long-term option. National statistics put the average deposit at more than £52,000, so it is no wonder that 52% of UK renters who took part in the survey said they could not afford to save for a house.

Although buying a house used to be a priority for many, this is no longer a reality for many people. The shift is changing towards rentals, with the private rental sector becoming more prevalent, much as it is in Germany and other European countries. The survey backs this up, with 61% of participants saying that renting suits their lifestyle because they did not want to be tied to one property or a lengthy mortgage.

Mr Phillips said the private rental sector is being seen as the solution to the lack of housing, with predictions that there will be more than seven million rented houses in the UK by 2025. The report concludes there has never been a better time to invest in property, because the buy-to-let sector will continue to grow. The number of people renting is growing, while the length of time they stay in a property is also increasing. These reports show that, despite tax changes, buy-to-lets are still a healthy investment in the right location.