61% of Renters Cannot Afford to Buy in 2010

Nearly two thirds of tenants cannot afford to buy residential properties reports the Residential Landlords Association.Rightmove’s first Consumer Confidence survey for 2010 found that 61 percent of all tenants in Britain contemplated purchasing a home, rather than renting, but will not be able to do so in the foreseeable future, for financial reasons.

While real estate prices are still noticeably lower than they were two years ago, this decline in values has not been enough to give most tenants a realistic chance of purchasing their own home, without taking on a massive debt. Even when these loans are available, many tenants are also hesitant to assume such large mortgages at a time when the job market has yet to recover and when renting offers more flexibility to move from one region to another in search of employment.

The number of tenants who feel that residential property prices are too high for them to even consider a purchase has been rising for the past three quarters, according to Rightmove’s surveys. Many other tenants are simply unable to meet the more stringent mortgage requirements, especially the hefty deposits that are required for a successful loan application. The majority of tenants also indicated that they expected to continue renting for the foreseeable future.

Approximately 55 percent of respondents expected to rent for the remainder of the year and for as long as three more years, while nearly one third of all tenants (31 percent) anticipated renting for more than three years. Rightmove noted that the results of the current survey indicate that 2010 may very well be the “Year of the Landlord.”