Since the launch of the Government’s Help to Buy scheme – in which 20% of the cost of a new build is loaned by the government, with the rest made up with a 5% deposit and 75% mortgage – the rental market has slowed down, say the Royal Institute of Chartered Engineers.
With the second phase of HTB launching in January, they reported that, at a national level, “Tenant demand and new landlords’ instructions … have almost ground to a halt.”
This would appear to have been confirmed by Rightmove’s report that one in three (32%) of private tenants plan to buy their first home in 2014, with the aid of HTB. However, Miles Shipside, Rightmove director and housing market analyst, said, “More tenants look set to buy in 2014, but saving a deposit still requires time and commitment, meaning that overall tenant demand is unlikely to change much.”
In reality, there is still a massive housing shortfall, meaning that, while Help to Buy will indeed pick up a number of private tenants in the short term, the long term affect on the lettings sector will be negligible. Fears of the private rented sector slowing down are unsubstantiated!