Rightmove’s latest data this morning shows that there has been a 23% increase in inquiries from people interested in renting. This leaves the total number of people wanting to rent or sell a property just 1% lower than last year.
After a turbulent couple of months, there are signs that availability and mortgage rates are starting to settle. There are also indications that they may drop further next year. This is leading some potential buyers to look at the rental market for a short-term solution while they wait to see how mortgage rates go.
The jump in mortgage rates has been particularly hard on first-time buyers, particularly those already stretched financially.
These future buyers will likely face more competition to rent a home than they would in the real estate market. Also, there is less choice. The number of available rentals homes, including studios and one- to two-bed properties, is down by 4%, whereas it is up 13% in the sales market.
Rightmove’s survey revealed that 42% of potential first-time buyers who had plans to climb the ladder within the next few years have their entire deposit saved. Another 43% are still saving.
This means that there are potential first-time buyers who will be able to buy once they feel more financially secure. These ready-to-go buyers could see an opportunity to enter the market in the New Year, particularly if they have more financial security, thanks to the Autumn Budget, which ensured stamp duty savings through 2025.
An average of 36 inquiries per property were received by letting agents. They also spend nearly six hours per viewing each property. Rightmove reported that this market is the most competitive in terms of rental property markets, with four times the number available for rental properties.
Rightmove’s property expert Tim Bannister said that it is understandable why some buyers, especially first-time buyers are anxious for more financial security.
There are indications that mortgage rates are starting to settle down. These indicators suggest that they will stabilize at a higher level than what previous buyers were used to. Someone who has saved their deposit and is ready to move may find this a better time than it was a few weeks ago. This is especially true with more choices and sellers offering more competitive prices in the run-up to Christmas.
Rightmove’s rental expert Christian Balshen said, “It is extremely frustrating for so many people right now, with such high demand. Tenants are trying desperately to get viewings of properties as soon they reach Rightmove. Agents are overwhelmed by the high demand and stock shortage. This is exacerbated by the increasing number of first-time buyers looking for a rental option.”
