Rising rates look likely to push rental demand up

09 2008
Demand for rental accommodation across the UK looks set to increase as mortgage lenders stop taking on new customers in an effort to shield themselves from the effects of the global credit crunch.

Just this week Abbey became the latest lender to withdraw its 100 per cent mortgage deal from the market, dealing another blow for those people looking to buy a property, and experts have predicted more institutions could follow this example or else put rates up for those borrowers who are only able to scrape together a small mortgage.

Rebecca Atkinson, news editor of moneywise.co.uk, explained: "I think there will be more lenders doing this; there are already cases of products being changed on a weekly basis.

"They have the choice to either put up rates or suspend lending altogether. Increasing rates is the more popular route for lenders to go because the suspending of lending can damage reputations. But it's fairly likely that others will suspend lending for new customers as well."

This trend among lenders is likely to increase the already-high demand for rental properties as professionals look to save money and enjoy greater flexibility while saving up for a large deposit. ADNFCR-1219-ID-18544117-ADNFCR

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