Are you ready to become a First Time Buyer? Private rents are rising at their fastest rate for seven years….

If you’re paying a high amount in the private rental sector, right now is a great time to look into the possibility of owning your own home. Whilst there is no obligation to pursue a good mortgage broker to assess what your purchasing capability is, there’s no harm in trying…

WHY? Please see below.

Tenants in properties owned by private landlords have faced the highest rise in rent since comparable records began seven years ago, official data shows.

Rents rose 4% last year as landlords, who face their own squeeze from higher mortgage rates, passed on those costs. They are projected to increase by a greater percentage in 2023.

A quarter of tenants surveyed in December said their rent had risen in the past six months, the Office for National Statistics (ONS) said.

Renters proportionally spend more on housing costs than owners do.

On average, they paid 24% of their weekly expenditure on housing compared with 16% by those with a mortgage, the ONS said, based on the latest figures from 2021.

Myron Jobson, senior personal finance analyst at Interactive Investor, said: “Higher rents have been accompanied by higher energy bills which continues to squeeze budgets.

“It is a tricky situation if you are looking for a new tenancy. Many renters could decide to remain in existing tenancy agreements with higher rents, rather than risk a move and spend even more.”

A growing proportion of people said they were finding it difficult to afford their rental payments, rising from 27% in late September to 31% in mid-December.

A higher proportion (45%) of adults with mortgages reported being worried about the changes in mortgage interest rates.

There has been a steep rise in mortgage costs in 2022, driven in part by the doomed mini-budget in October ’22. Rates surged as the markets reacted unfavourably to promises of tax cuts without an explanation of how they would be funded.

Thankfully, the average cost of a new, two-year fixed-rate mortgage has fallen slowly since markets stabilised, but is still much higher than it was last year at 5.78%. How long before these rates increase once more?

The ONS points out that many thousands of homeowners face sharply higher mortgage costs when their current fixed-rate deal expires. But the good news is that rates are showing a recent reduction as below, so it could well be a good time to give your friendly Broker a call….