Are rent increases pricing potential buyers out of the market?
Market analysts are forecasting a slowdown in the property market as a result of recent government legislation, as steadily increasing rent prices are expected to hamper efforts by potential buyers to raise the necessary funds to purchase a house.
According to the Royal Institute of Chartered Surveyors (RICS), tougher taxes on buy-to-let properties will cause rent prices to rise up to 25% over the next five years, as landlords pass the extra costs onto private renters. Recent government measures aimed at increasing home ownership throughout England may end up having the opposite effect, as potential UK property buyers find it increasingly difficult to save.
“In the long run I’m concerned that rents might increase rapidly,”
states Simon Rubinsohn, RICS chief economist.
“Critically our principal concern with the measures announced by the government is that they are overly focused on promoting home ownership, at the expense of other tenures.”
With the average Brit already spending approximately 12% more of their income on rent than their European counterparts, this latest legislation has the potential to limit the number of first-time buyers entering the market more than ever before. Furthermore, those approaching middle age who have been unable to secure a mortgage thus far could find themselves stuck in the ‘rent trap’ for the rest of their lives.
While the government hopes that the increased number of new homes being built will help to stabilise the rise in house prices, this is ultimately bad news for those hoping to sell property fast, as the numbers of available buyers could begin to dwindle.
If you’d like to sell your house quickly, ask National Homebuyers for advice, as we guarantee to buy any home. Call 08000 443 911 or request a call back to find out how much you could get for your property.