SELL YOUR HOME QUICKLYProspective first-time homebuyers now struggling to make the rent
An increasing number of UK first-time homebuyers have been unable to secure mortgages in the wake of the credit crunch, reports Times Online. Added pressure is now being placed on prospective buyers, as rental rates have increased by as much as a third in some areas.
Recent statistics released by Paragon, a buy-to-let mortgage lender, reveals that the overall monthly expense of renting a home has increased by approximately 11.7 percent throughout the UK.
Experts say that the mortgage approval rate is a good indicator of the property market’s overall condition. Considering that some pundits expect property sales to halve during the year – bringing the figure down from 1.78 million sales in 2004 to 1.17 million at the end of this year – the general outlook is rather bleak.
CEO of Belvoir (the UK’s largest letting agency), Mike Goddard, explains, “The lettings market is booming and what that's doing is pushing rents up. Demand is increasing from first-time buyers, who are finding it even more difficult to get into the market.”
According to a director of the County Homesearch Company, Katy Waite, “Many of our clients are facing the prospect of being gazumped after bidding for properties to rent. Landlords have people queuing up, ready to pay full deposits on the spot and the full rental price without question.”
Research from the Association of Residential Lettings Agents shows that approximately 40 percent of all real estate agencies in the UK have more customers at the moment than they have properties available to lease out. Tenants, who are unable to comply with the current strict mortgage conditions, are choosing to live in rented accommodation for extended periods of time. Now that rental rates are increasing so sharply, however, it will take even longer for prospective homebuyers to set enough aside in order to qualify for a mortgage.
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