Member Article

40, 000 more North East families forced into renting by 2018

Rising property prices will stop an extra 40,000 people in the North East from getting a foot on the property ladder over the next 5 years – with young families set to be the hardest hit.

One North East property expert predicts “more and more people are not earning enough to save up for a deposit, but earning too much to get government help buying a house – as a result more families will never own their own home than in living memory.”

Research from property consultants Savills predicts that 1,000,000 more UK households will be forced into private renting by 2018 – with a mismatch between the supply of housing and the demand forcing property prices up by as much as 25%.

If correct it could mean at least 40,000 more North East families unable to save up the deposit they need to ever buy their own home.

Savills’ research also forecasts the most demand for rented homes coming from tenants aged between 35 and 44, particularly those with young families.

4.3m UK households are already living in privately rented homes – with home-ownership levels declining this century.

Ajay Jagota of North East property firm KIS Lettings, who manage properties for 700 landlords from branches in Sunderland, South Shields, North Shields and Welwyn Garden City, resonded to the research:

He said: “I can’t personally see North East property prices rising by as much as 25% between now and 2018, and mortgages are becoming easier to secure, but many people are still going to be left behind by the housing market – in particular those in their twenties and thirties and with young families.

“More and more people are not earning enough to save up for a deposit, but earning too much to get government help buying a house – as a result more families will never own their own home than in living memory.

“For all the bad press they get – deserved and more often than not undeserved – landlords have a crucial role in easing that impact by bringing new properties to the market.

“In exchange for offering secure tenancies in high quality homes for affordable rents, it seems they will increasingly benefit from high quality tenants.

“Savills’ research also shows that the biggest reason people move from rented property to rented property is in pursuit of higher standard homes, so it doesn’t mean that the rental sector won’t remain highly competitive, which is why property investors will generally benefit from the support of a letting agent.”

This was posted in Bdaily's Members' News section by Ajay Jagota .