First-time home buyers – do you want the good or bad news first?
House prices are flat or falling across half of the country, thanks to uncertainty over Brexit putting off potential purchasers, according to The Royal Institution of Chartered Surveyors (Rics), whose new report said the market is at its weakest point for six years.
But in a blow for those hoping to buy their first home, rental prices are also expected to rise, making it even harder to save for that all-important deposit.
If you don’t already own your own place, a fall in house prices might make homeownership seem within closer reach. But as anyone who rents will know, landlords and letting agents are finding ways to squeeze as much money from you as humanly possible, be that through letting fees, claiming parts of your deposit, and now – it has emerged – from simply charging you more rent.
According to Rics, it’s a case of rental demand outstripping supply. “Our recent surveys have shown that recent policy changes around buy to let have had a negative effect on the number of homes available to rent, and with demand increasing from tenants in most parts of the country this is causing rent rises,” said Rics’ chief economist Simon Rubinsohn.
If you already have the deposit funds to put towards your first home, and can get a mortgage, then it could actually be a good time to buy – especially if you are looking for a property of high value, because the “highest price brackets are noticeably below asking price.”
However, there is also a lack of fresh properties coming on the market, the Rics report said.
And for those who do not have the money for a deposit, it could be tougher to save. Regardless of all the swipes taken at young adults about how they spend their money (avocado on toast being the most yawn-inducing example) – you do need to have a great wad of cash in the first place to buy a home.
And if you’re stuck renting in the UK – where people spend an average of between 23 per cent and 41 per cent on their earnings on rent depending on the area, the idea that rents are going up – even, as Rics says, “albeit only modestly”, will compound this problem.
“Unless more is done to encourage good landlords to increase the stock of rented property young people will end up paying more than previously, which will make it harder for them to save the deposit for the new homes the Government is striving to build,” said Rubinsohn.
“Affordability of housing is a critical issue and the supply issue really needs to be addressed to ensure that the market is functioning effectively for both those who wish to rent as well as those who want to buy.”