26 Jun

First-time buyers hit by rising rents

First-time buyers hit by rising rents

After being hit by tighter lending conditions and the disappearance of the 100 per cent mortgage, prospective first-time buyers are now being affected by rising rents, it has been claimed.

Commenting on new figures from buy-to-let mortgage lender Paragon that show that rents have risen by up to a third in some areas, the Times suggested that this will inhibit their ability to save for a deposit.

Paragon found that monthly bills for a rented home have increased by an average of 11.7 per cent across the UK, while tenants in the south-west are paying nearly 30 per cent more in rent than they were a year ago.

Meanwhile, the newspaper noted that at the same time, banks have increased rates, raised the cost of borrowing and demanded ever-bigger deposits.

It spoke to Mike Goddard, chief executive of Belvoir, who said: "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."

Last month the Association of Residential Letting Agents found that over the past three months, the proportion of letting agents reporting that demand for rental properties is outstripping supply has remained at a historic high of 39 per cent.
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