Good news for the lettings market, according to an article I came across on the Property Reporter website. The Help to Buy Scheme, whose second phase was launched by the government in October to allow borrowers with a 5% deposit to buy property worth up to £600,000, will leave a positive mark on the lettings market as well.
There could be fears among landlords that the mortgage guarantee programme would hamper demand for rentals, as the scheme would encourage more people to switch from renting to getting on the property ladder. However, its impact is not expected to be hugely significant.
The government scheme is most likely to favour existing home owners who want to move to a larger property. This will immediately impact the lettings market because the vacated properties will spur the interest not only of first-home buyers, but of investor landlords as well. The scheme will, in this way, enhance supply for tenants. This could be a noticeable development since, in many regions, demand is higher than the number of homes available for rent.
Not all people renting a house do so because they can’t afford to become a home owner, the article noted, taking into account results from a recent survey involving more than 5,500 tenants. The study revealed that two in five tenants prefer to rent a house due to the flexibility it provides and another 8% stated that owning a home was a too big responsibility.