Unstable UK politics is making buyers nervous
IN a recent survey by The British Leasing and Rental Association to identify why so many are opting to pay monthly for products and services, results have shown that when it comes to shelling out the cash for a big purchase such as a house or a new car, 40 per cent of those surveyed admitted that the current unstable political climate is deterring them from going through with the purchase.
There is certainly an emphasis on renting over buying these days as it becomes increasingly difficult for younger people to get onto the property ladder.
Buy-to-let has grown significantly over the past few decades and a push for longer tenancies for renters is certainly apparent in today’s UK property market.
However, even renters look set to suffer due to the ongoing instability, with the Royal Institution of Chartered Surveyors projecting that rents will increase faster than property prices over the coming five years, at 25pc and 20pc respectively.
While this is worrying news for those who already can’t afford to buy, and may in the future face the prospect of not being able to afford to rent as well, the rental market is governed by regulations intended to make it a fairer and cost effective alternative to home ownership.
The government has only recently announced its plans to rebalance housing policy to better help renters and improve good housing supply in that direction.
So what are the benefits associated with long-term leasing? The obvious one is that tenants are not tied down indefinitely to one property and are able to leave once the minimum tenancy period has ended.
As long as there is supply enough to meet rental demand, this gives renters more flexibility to stay buoyant if their financial situations change.
On the other hand paying rent every month doesn’t give you anything back. Even though average house prices have risen over the past few years, rents have too, and mortgages can still work out cheaper.
Weighing up the pros and cons of each option is essential but it seems renting is no longer a stop-gap for many UK residents, but a viable alternative to buying outright.