Tenants saving to buy homes and leave the rented sector now say their moves are likely to be delayed because of the cost-of-living crisis, research from Paragon Bank has confirmed.
The mortgage lender’s survey of over 2,000 tenants of privately rented homes found that just over one third (35 per cent) were actively saving to buy a home.
Over half of these aspirational homebuyers (56 per cent) said the cost of living crisis had dented their plans, and that they were now only slightly confident or not confident at all that they would be able to save enough for a deposit.
Even so, four in 10 of those who thought it unlikely that their saving will be impeded by the crisis said they would be ready to purchase a property in the next one to two years.
Over a quarter (28 per cent) of those who are confident in their deposit raising ability expect to buy a home even sooner – within the next six to 12 months.
‘Our latest tenant research confirms the logical expectation that the pressure placed on household finances will limit the capacity for some people to save for the deposits necessary to buy their own home’, said Paragon director of mortgages Richard Rowntree.
‘This has implications for the private rented sector because a sizeable proportion of these aspirational homebuyers will remain in rented properties for longer while they battle the rising cost of living to put aside funds needed to secure a mortgage. In turn, this will place further pressure on the supply of rented homes which is already surpassed by demand, exacerbating rising rents and limiting choice for tenants.
‘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’.