Four in 10 first-time buyers have their deposit saved but appear to be waiting in the hope mortgage rates will drop back in the New Year, according to research by property site Rightmove.
This group of would-be buyers are turning to the rental market and the shift is putting pressure on the stock-strained market, the property website said.
Agents reported managing 36 enquiries a property on average as competition between tenants hits record levels.
At the same time, the number of smaller available rental homes is down by four per cent, but in the sales market is up 13 per cent.
Rightmove’s Tim Bannister said: “It’s completely understandable why some buyers, particularly some first-time buyers, are waiting for some more financial certainty. 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.
“If someone has their deposit saved and is ready to move, they may find that right now presents a better opportunity than a few weeks ago, particularly with more choice coming onto the market and some sellers pricing more competitively in the lead up to Christmas.”
Christian Balshen, Rightmove’s rental expert added: “It’s extremely frustrating for so many people in the rental market right now, with demand so high. Tenants are trying to secure viewings for properties as soon as they hit Rightmove, and the stock shortage means that agents are dealing with an unmanageable number of enquiries.
“The number of aspiring first-time buyers who have now had to turn to the rental market is exacerbating the situation further. We’re seeing some more properties coming to market, but nowhere enough to meet demand.
“We’re hearing from agents that finding out more information about a tenant earlier is one way they are trying to cope with demand, so we’d recommend to anyone looking right now to give as much info as possible about their position, how quickly they can move, and to get their references ready so they have a better chance of getting the place they want.”
