Landlord confidence high as tenants still struggle to buy homes.

18/11/2013 By Mark Long

Only a quarter of tenants have plans to buy a home despite the arrival of the Help to Buy mortgage guarantee scheme.

A report conducted by BVA BDRC found a division over future home ownership has emerged within those currently in the rental sector.

While 27% of tenants said they planned to buy a home in the near future, 39% said they wanted to continue renting properties. The report found this figure could be due to renters still being unable to raise a suitable deposit, even with government-backed Help to Buy products now available.

This situation has sent confidence among landlords to its highest level since the financial crisis with more than two-thirds anticipating ‘good or very good’ business in the next few months, the highest proportion since the third quarter of 2007.

However, tenants reported they did still have concerns about the rental sector. They told BVA BDRC that communication from landlords was poor. Nearly half said they were fearful of being kicked out of their rented home at short notice with little they could do.

But increasing property prices combined with strong and, in many regions, rising rents are solidifying landlords' commitment to the private rental sector, encouraging them to expand rather than contract their rental portfolios. Nearly a quarter of the 1,000 landlords who took part in the survey said they planned to increase their rental business in the next few months. Only 7% were looking to exit the sector.

The vast majority of landlords said they felt property was still the best way to invest their cash. For tenants this means a commitment to hold their properties for the long term, which, despite tenants' fears to the contrary, is likely to signify greater security and longer tenancies.

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