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People choose to rent property instead of buy

29 June 2005

Many people living in rented accommodation are not buying houses because they do not want to, a new report has found.

A more flexible lifestyle, and a large availability of good-quality rental property, means that affordability is not the only thing stopping people climbing onto the property ladder, a study by GMAC-RFC has revealed.

The study found that almost three quarters of potential first-time buyers (71 per cent) see buying a property as synonymous with settling down. GMAC-RFC, the 12th largest mortgage lender in the UK, adds that there is a strong cultural trend to postpone big life commitments, especially amongst graduates.

According to figures the single biggest stumbling block to buying a first home was raising the deposit - cited by 48 per cent of prospective first-time buyers - but attitudes towards settling down, getting married and having children are very nearly as important and cited by 44 per cent of people.

This implies that Government initiatives, based on affordability and aimed at boosting the number of homeowners in the UK, might be missing the point.

In addition, the new report found that most people are comfortable with the idea of renting into their 30s, and eight in ten tenants preferred renting as it meant they did not have to make a long-term commitment to a specific area.

Seven tenants in ten preferred renting as it allowed them to live close to friends, while six in ten said renting let them live in a better area than they could afford to buy in.

The urge to travel also played a part in the desire not to buy, with 72 per cent of tenants saying renting gave them the option for future travelling and 71 per cent said it let them move jobs more easily.

"It is important to understand that there are other important influences affecting [first-time buyers] other than the straight affordability issue," said Stephen Knight, executive chairman of GMAC-RFC.

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