Research by mortgage market specialist Pegasus Insight suggests a flood of renters preparing to move into homeownership.
It says some 29% of tenants have researched the affordability of buying a property in the last 12 months, with many actively saving for a deposit.
The research suggests a pipeline of first-time buyers may be forming, particularly among younger tenants aged 25 to 34, over two-fifths of whom have explored whether they could afford to purchase (43%) while more than a third have searched for a potential property to buy (34%).
In Central London, 39% of renters have checked affordability, 20% have viewed prospective homes while 21% have spoken to mortgage advisers.
Looking to the longer term, 51% of tenants say they plan to buy a property at some point, while 22% believe they will stay in the Private Rented Sector for the foreseeable future.
Intention to buy declines with age – 68% of 18-34s hope to buy their own home, while just 15% of renters aged over 55 aspire to become homeowners.
Mark Long, founder and director of Pegasus Insight, comments: “Too often, tenants are seen as a captive audience for landlords rather than tomorrow’s first-time buyers. But the fact that nearly a third are actively researching mortgage affordability shows there is a sizeable group getting ready to transition into homeownership.
“… One of the most important steps the market can take is to evolve affordability assessments. At present, many would-be buyers find themselves excluded, even if they have a proven track record of paying rent at levels equivalent to – or greater than – the mortgage they would be taking on. Innovative solutions that factor in rental payment histories are a good example of how to widen access.
“With the Financial Conduct Authority having recently relaxed its guidance on affordability, some lenders may judge this to be the right time to broaden their approach. Recognising consistent rental records could help ensure responsible tenants are not unfairly locked out of homeownership.”
The research involved 3,000 15-minute online interviews with tenants currently renting in the UK; interviews were conducted last month.
This article is taken from Landlord Today