RLA : RPI : Renting is 'more acceptable' choice

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other artilces from the August / September 2003 issue

Renting is 'more acceptable' choice - August / September 2003

House purchase remains a popular choice for young people, but not necessarily to live in themselves.

UCB Home Loans has picked out two growing trends in accommodation patterns. While more young people are choosing to rent property, there is also growing long term investment in rental property.

The choice of many would be first time buyers to rent rather than buy is partly to do with the rapid rate of house price increases over the last five years which have meant larger and larger deposits are necessary, said UCB Home Loan managing director Charles Reed. 'But it is also evidence of a gradual shift in perceptions in the UK housing market. Choosing to rent is becoming more acceptable for a wider group of people, particularly those who are young and single'.

At the same time, investing in property is becoming a popular alternative to putting money into a pension, he said.

Gross buy to let lending has increased in each of the last three six month periods, going up from £4.1bn in the second half of 2001 to £6.7bn in the last six months of last year. At the end of 2001 there were an estimated 275,000 buy to let mortgages outstanding worth £24.2bn.

Rents have been rising in areas of the country where they are relatively low, but have been static or have fallen in other areas, said UCB. Bristol, Northampton, Leeds, Manchester, York, Newcastle and the suburbs of a number of major cities such as Birmingham and Nottingham have been the most active in buy to let activity, it reported.

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