With raising rates and high inflation dominating the headlines over the past year, many renters are putting off their buying plans until property becomes more affordable, according to the latest research from The Mortgage Lender (TML).
Almost one in five (19%) have said that high mortgage rates mean they can’t afford to buy now and have put plans on hold completely, whilst 12% said that they would stay renting until prices came down.
For others however, keeping an eye on the numbers is key to figuring out their next step, with 10% saying that they were waiting for rates to fall. Similarly, 9% agreed that there is no point in looking to buy until rates come down, and 6% are waiting to see the Bank of England’s next base rate decision before making a decision.
Despite this, 6% have said that they’re progressing with their home buying plans, though they’re having to make significant compromises in order to do so. A quarter of those still planning to buy say that they’re now buying away from traditional commuter towns, and 32% have had to move further from the city centre. Likewise, 16% are buying in an area with cheaper living costs to combat higher costs.
Others are having to reconsider the properties themselves, with one in five (21%) saying that they’re buying a cheaper property that needs more renovation work, and 12% are looking to buy smaller properties instead.
Steve Griffiths, chief commercial officer at TML, said: “The journey to buying a property can be a long one, and it can easily be complicated by the ebbs and flows of the housing market, particularly when we consider the current landscape. Although being adaptable and regularly checking in on the base rate will serve renters well in the long term, it’s understandable that so many are feeling frustrated by their options.
“This really highlights just how vital it is to speak to a broker early about your property ambitions. They can help breakdown how much you can afford, as well as any other available options. If it’s not the right time to buy now but you plan to in the future, make sure you are still working towards becoming ‘mortgage ready’. This will ensure when the time is right you are prepared to take that next step. Even in challenging times, potential buyers should remember that there are lenders that can support them, and a broker will be key in being able to help find the best deals.”
