Eight Out Of Ten London Renters Priced Out Of Housing Market
Submitted by Laura Shepherd on 27/09/2011 - Senior Marketing Manager
Over half of London’s renters are actively saving to purchase a house, but eight out of ten will be unable to actually buy once their current tenancy agreement comes to an end, according to research commissioned by furniture rental specialist Roomservice by CORT to look into the capital’s residential lettings sector.
In a sign of the extent to which the housing market is closed to first-time buyers, 56% of renters said they were currently saving towards a deposit to buy a home, while only 19% said they would be in a position to buy when their lease expired. A further 20% of renters said they would like to save towards a home purchase, but could not afford to do so, a problem exacerbated by the respondents’ average rent of £915 per month, equivalent to approximately 34% – over a third – of their net household income.
The survey also revealed that 40% of the capital’s renters had been doing so for five years or more, with the average length of time spent renting now as high as 4¾ years. In a sign that the residential lettings market is failing to offer lease terms that are suited to people’s lifestyles, 31% of tenancy agreements are on a rolling monthly basis and a further 43% are for one year or less.
Further standout data generated by the research includes:
• 56% of rented properties are flats or apartments, with 42% having two bedrooms
• Two thirds of renters live in properties that are either fully (38%) or partly (28%) furnished
• 58% of renters are satisfied with their current rental property
• 52% of tenants have a good relationship with their landlord / letting agent
• Cost of rental is the main consideration when choosing a property, with 88% rating it ‘important’
• 52% consider furniture important, with 45% having left or considered leaving due to poor furniture
• 68% of respondents would consider paying more for better furniture, while seven in ten would consider renting furniture
Roger Hollis, managing director of Roomservice by CORT, comments: “What this research has clearly demonstrated is that the residential lettings sector is currently in a state of considerable flux, with both landlords and tenants only now starting to adapt to new realities.
“These results suggest that over a third of London’s renters are effectively excluded from buying their own home despite actively saving towards such a goal. This isn’t a choice on their part but a fact of life when living in London in 2011, and the full effects are only just beginning to be seen. An average monthly rent as high as £915 per calendar month is a corollary of the higher demand for rental property that currently exists.”
“The average time spent renting among this sample was 4¾ years and, with only 19% of respondents in a position to buy their own home at the end of their current lease, this is a figure that is sure to grow over the coming months and years.
“The disconnect between those aiming to buy and those in a position to do so suggests a high proportion of reluctant renters in the market, renters who could well be happier with the security of longer-term leases. It is a concern that rental agreements haven’t lengthened to reflect the ‘new normal’ of people renting for longer.”
The research, which surveyed those currently renting within the M25, was designed to analyse how attitudes towards renting are changing as people are priced out of buying their own home. Questions were asked regarding their home-owning aspirations, their experiences of the rental sector and also their opinions towards items such as furniture and other key influencers.
Roger Hollis continues: “This survey has painted an interesting picture of the London residential lettings market, one where there is a general level of satisfaction but an overriding feeling that things could be better.
“As the length of time spent renting increases, there is a pressing need for a professional, institutional approach to the sector. Institutional landlords, who prioritise long-term security of income over short-term flexibility, are best-placed to deliver multiple-year leases that give renters the security of tenure that matches their requirements.
“As the tenants themselves come to terms with the changing face of London’s rental market and find themselves – often unwillingly – renting for far longer than previous generations, it is essential that housing supply adapts to meet their needs. With people having to wait for loner before buying their first home a genuine paradigm shift is taking place, the full repercussions of which are still to be realised.”
To download the full research doucment, please cick here: https://www.roomservicebycort.com/tenantresearch/