First-time buyers 'can't raise deposits'

26-Mar-2009

Many would-be first-time buyers are renting property because they cannot afford a mortgage.

Chris Horne, editor at Property Hawk, an advice site for landlords, said first-time buyers were struggling to raise "increasingly large" deposits in order to step onto the first rung of the property ladder.

He said these would-be buyers were renting property instead of buying.

"The rental demand from that sector will continue to keep rents fairly stable in the long term," he said.

According to the Gumtree Rental Index, average rental prices in the UK dropped by 2.2 per cent in the first quarter of 2009.

A report by FindaProperty said that over the last year rental prices had fallen by 5.3 per cent.

But Mr Horne believes that with more first-time buyers being forced to rent property, rental prices will be "relatively" stable.

The number of mortgages that were approved for first-time buyers in January was 27 per cent less than in December 2008, according to the latest figures from the Council of Mortgage Lenders.

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