Renting growing in popularity as mortgage rates soar

25 2008
As the cost of a mortgage for first-time buyers reaches a record high across the UK, growing numbers of professionals are opting to rent a property, a new report has concluded.

According to figures compiled in the UK Housing Review 2007/2008, the average first-time buyer now has to spend almost 35 per cent of their income on a mortgage, representing a significant rise over recent years and overtaking the previous record high of 34 per cent seen in 1990.

In comparison, the cost of renting a home has only increased in line with earnings, the report published by the Chartered Institute of Housing and the Building Societies Association revealed.

Furthermore, rents are currently around 64 per cent of mortgage costs on comparable properties, the study also found.

Steve Wilcox, professor of housing policy at the University of York and author of the review, said: "Private renting has become far more competitive as an option for households compared to the cost of buying.

"With the rates of population and household growth outstripping current and planned new house building, we are likely to see continuing growth of the private rented sector," he added.
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