Renters move out of town to buy.
According to research by Countrywide plc, the UK’s largest property services group, renters who bought a home in the last year, did so in locations where the average house price was £35,000 lower than where they were renting, this was £93,000 lower for London renters. As house prices rise faster than rents, an increasing number of households find themselves renting in places where they couldn’t afford to buy.
The growing number of tenants moving further to buy is both a product of stretched affordability and first time buyers getting older. Tenants are increasingly choosing to compromise on location in in order to own their first home. In addition to affordability, space is a deciding factor of where tenants choose to purchase. Irrespective of location, those tenants making the move further afield also tend to buy the largest homes. Nationally, 32% of renters who buy in the same town buy a home with three or more bedrooms, a figure which rises to 45% amongst those buying elsewhere.
Commenting Johnny Morris, Research Director at Countrywide, says: “Renting enables many tenants to live in areas where they could not afford to buy but that means aspiring home owners often have to look elsewhere to find a home they can afford. It’s common for first time buyers to make sacrifices to buy their first home, so with price rises in recent years outstripping income growth, more are choosing to bypass rising prices by looking further for cheaper areas.
“Renters are getting older too. With over 30s and families the fastest growing types of tenants, renters buying their first home are getting older and are more likely to do so at a later stage of life. They’re skipping owning the small central city flat, in favour of the larger family home the first time around.
“Rents continue their growth over the year, with prices supported by falling numbers of homes available to rent and sustained demand from tenants. Seasonal factors usually see the rate of price growth slow in the second half of the year, after the rush in activity over summer starts to subside, hence small month-on-month falls in September.”
The full report by Countrywide can be seen on their website: http://www.countrywide.co.uk/news/countrywide-quarterly-lettings-index-q3-2015/
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