High mortgage rates push UK first-time buyers towards rental market – Rightmove

By Suban Abdulla

LONDON, Nov 25 (Reuters) – Demand for rental homes in
Britain rose in October as prospective first-time buyers put off
purchases amid the surge in mortgage rates, property website
Rightmove said on Friday.

Enquiries from people looking for properties to rent jumped
by 23% compared to October 2021 and the total number of those in
the market looking to rent or buy was down 1% from the same time
a year ago.

UK mortgage rates have risen above 6% in recent months,
gathering speed after former prime minister Liz Truss’s Sept. 23
“mini-budget” roiled financial markets.

Rates have since started to come down following new finance
minister Jeremy Hunt’s Autumn Statement, which guaranteed stamp
duty savings until the end of March 2025.

First-time buyers have been the hardest hit by the surge,
forcing them to consider renting in the short-term while they
wait to see where mortgage rates settle, Britain’s biggest
property portal said.

“It’s completely understandable why some buyers,
particularly some first-time buyers, are waiting for some more
financial certainty,” Tim Bannister, property expert at
Rightmove said.

“Now that there are signs that mortgage rates are settling
down, the indicators are that they will stabilise at a higher
level than previous buyers had been used to.”

The survey found 42% of would-be first-time buyers planning
to get on the property ladder in the next few years have already
saved their total deposit as they wait for rates to drop. An
additional 43% were in the process of saving.

The figures highlight the mounting pressure facing renters,
who are already contending with a huge surge in bills as the
costs of energy, petrol, food and council tax increase.

Incomes also face the tightest squeeze in decades as real
wages fall in the face of the highest inflation in 41 years.
(Reporting by Suban Abdulla; Editing by Jon Boyle)