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Demand for rented property set to skyrocket
Despite Government plans to build 400,000 affordable new homes by 2021, new research suggests that the demand for rental accommodation is set to climb by 1.1 million households in the same time period.
This increased demand in rental properties is predicted to take place even if the Government are successful in their plans to build all of the new homes.
A spike in demand
The research, carried out by property agent Savills, suggests that the demand from renters means a further 220,000 rental properties will need to be made available each year to catch up with the ever-growing demand for housing.
Recent statistics from the ONS found that house price growth outstripped wage growth by three times as much in the four months leading to November 2015, where Savills found the level of stock in rental properties has fallen by 2.8% in the past five years. The property agent suggest in their research that the prospect of owning a home has been pushed out of reach for many due to this, with more and more people resorting to renting privately.
The best value property areas
In the research, Savills addressed which UK cities offered the best-value for those looking to invest in buy-to-let properties or buy a home. The study found cities such as Manchester, Reading, Edinburgh and Bristol snatching the top spots from the rest of the UK due to their liveable reputations and strong potential for growth.
On the other hand, areas like Leicester, Aberdeen, Newcastle, Bath and Bournemouth sit at the other end of the scale, offering little incentive to investors. Despite being a highly sought-after area, Cambridge received a low score as the high house prices already leave little room for growth in the future.
Getting help from the Government
If you’re a first-time buyer, whether you’re currently renting or living with your parents, the Government have a number of schemes available that could help you take the first step on to the property ladder.
The Help to Buy ISA*, for example, is available to help you save for your first home. It will pay you 25% on top of what you save and you can save up to a maximum of £200 a month, or £12,000 in total. By saving £12,000, the Government will help you out with an extra £3,000.
If you live in London, an extension of the Help to Buy equity loan scheme came into play on the 1st February 2016, allowing first-time buyers the opportunity to have just a 75% mortgage and a 5% deposit by offering an equity loan. You can find out more here.
For a full range of all the Help to Buy schemes currently offered by the Government to help first-time buyers get onto the property ladder, head here.
Widening your search
You may not be a first-time buyer, but if you’re currently stuck in a vicious cycle of renting and hope to buy a property, it can be a tough situation to be in. It’s important to remember that even if you can’t afford to save much each month, it all adds up. The more you can set aside each month for a deposit, the better. Try and find a competitive savings account to earn the most out of the money you set aside.
Also, depending on your job and how free you are to move about the country, you may find more luck house-hunting elsewhere. House prices differ all over the UK, and what you’re able to buy in one city may be half what you can buy in another. That’s why it’s important to consider moving elsewhere if you’re able to do so.
*It was reported in August 2016 that the government bonus on Help to Buy ISAs cannot be included in the initial deposit on a home, but is paid once the sale has completed. Find out more here.