kb-network    News 19 Sep 2016

Rightmove says Generation Rent is likely to grow as house prices increase

The latest report from Rightmove does not paint a rosy picture as far as kitchen and bathrooms sales are concerned.

While on one hand there is the feel-good factor that property price increases bring to those that already own homes, the so-called ‘first rung on the property ladder’ is moving even further out of reach for a lot of first-time buyers. And property renters do not tens to buy kitchens or bathrooms.

Miles Shipside, Rightmove director and housing market analyst said: “Some of those trying to get onto the property ladder may have wistfully listened to speculation of lower prices in a post-Brexit Britain. While the referendum result has created additional downwards price pressure in some upper segments of the market that were already slowing, those who do not own a home and arguably have the greatest housing need are now finding it harder to achieve their goal in the post-Brexit-vote aftermath. In their favoured target sector with two-bedrooms or fewer average asking prices have jumped by over £6,000 in the last month as we enter the typically active autumn market.”

While Help to Buy has encouraged much-needed building of more entry-level homes, this is the sector that has historically had the greatest demand and therefore requires the greatest supply. Churn in this sector has also been diminished since the turn of this century as buy-to-let landlords, having heavily concentrated on buying up smaller homes as a long-term investment, typically do not sell as often.

“The rising tide of prices is marooning more and more first-time buyers, out-stripping their ability to meet stricter lending criteria and afford the required deposits and monthly repayments,” warned Miles Shipside. “Increasing numbers are being cut off from home-ownership altogether and while schemes are in place to help, the additional demand they create is not matched by available and affordable supply. With an average rise of over 10% in prices of typical first-time buyer properties over the last 12 months, minimum entry prices in some locations will go above what lenders are able to lend to most aspiring first-time buyers.”

Rightmove.co.uk is the UK’s leading property website, displaying details of homes for sale or rent to the largest online audience. Rightmove measured 131,323 asking prices – circa 90% of the UK market. The properties were put on sale by estate agents from 7th August 2016 to 10th September 2016 and advertised on Rightmove.co.uk. This month 6,497 properties have been excluded due to being anomalies.