Figures released last week showed 2,384 Help to Buy mortgages had been agreed within a month of the scheme’s launch but a potential leap in first-time buyers had sparked fears for the rental market.
However, more than half of respondents (55%) said they expected rents would continue to rise in the near future, despite the impact of Help to Buy.
Lloyds Banking Group and Royal Bank of Scotland are currently the only lender groups offering Help to Buy mortgages at present although HSBC will launch its first products on Monday. The latter will undercut its two rivals on rate and follows Yorkshire Building Society’s launch of aggressive non-Help to Buy products at 95% LTV this week.
A quarter of voters in our poll thought Help to Buy would cause rents to level off as people move away from the rental sector and into home ownership while a further 18% expected yields to fall.
“A significant fall in rents is unlikely given the sheer scale of demand – and fundamental restrictions on the supply of new homes,” David Brown, commercial director of LSL Property Services, told Mortgage Solutions.
“Partly as a result, we estimate that around one-in-five people in the UK is now renting in the private sector – a proportion that’s gradually rising. Combined with a healthier economy and recovering mortgage market, schemes like Help to Buy will definitely have some impact on that figure.
But even if the growing backlog of aspiring homeowners can be offered enough help, there are more and more joining their ranks every year. For many households even a 5% deposit is a struggle. So for the time being at least, the rental market is more realistic – and more immediately affordable – for millions.”
