The increasing cost of home ownership is a key factor in the growing preference for long term rentals.
In the UK the average asking price for a home is now £367,501* and for a first-time buyer this would require a stamp duty payment obligation of £3,375. Based on such an asking price, an average 15% deposit is now £55,125.
For many young people eager to get a foot on the ladder, this is an increasingly difficult if not prohibitively expensive proposition and it’s one reason why intentional long-term rentals are becoming more popular.
Hawkin’s lettings manager, Craig Arnold, says other factors include the rising cost of maintaining a property and the inflexibility of home ownership.
He said: “Ever since Mrs Thatcher introduced the Right to Buy policy in the 1980s the aspiration has been to own rather than rent. Renting was merely seen as a stepping stone to save up for a deposit.
“Back then, prices and deposits were relatively affordable and so it was easier to achieve that ambition.
“Fast forward 40 years and given the huge rise in property prices which are outperforming wages, it’s no wonder many are simply unable to get the wherewithal to fund a deposit.
“However, private rental is still attractive in the UK for a great many people. This is due to a lack of council housing as a result of more than 1.5million homes sold under the Right to Buy scheme.
“Over the last few years, we at Hawkins have seena growing trend in people choosing long term tenancies, fuelled in part by the escalating cost of property prices and home maintenance but also because people want more flexibility.
“Many don’t want to be tied down with an expensive mortgage over 25 to 30 years, orhave the stress of finding the cash to fund a deposit or stamp duty. There is a feeling the last two years have shown how precious life is and many have re-evaluated their lives and altered their prioritiesas a result.”