As we all know the demand for rental properties has increased and so has the cost of rent per month for the majority of tenants.
The property rent index provided by findaproperty.com shows that the price of rent has increased every month and was up by 4.6% in comparison with the same period 12 months ago. So when will we see the trend of renting a property to buying a property change?
Cheaper to acquire a mortgage
If rents increase at the current rate it will become cheaper to acquire a property mortgage. Most mortgage lenders are now asking for a larger deposit and with cost the cost of renting and increase in the cost of living this is making it much harder for the average person to save up for a deposit.
We have found a marked increase in property purchases in comparison with last year which is a very good sign for the market. Banks now need to start providing mortgages with a more realistic deposit request to help first time buyers, thus freeing up the bottom end of the market and hopefully creating a domino effect.
There is is still a long road ahead before we see the market recover to it’s height of 2007.