First-time buyers trapped by rent rises

First-time buyers trapped by rent rises

The dream of homeownership has slipped farther from the reach of first-time buyers, who have been unable to afford a home because of the credit crunch.

Property Week - 25 June 2008

They are being squeezed again, by surging rents - up by almost a third in some areas - and by yet another increase in borrowing costs.

Monthly bills for a rented home have risen by an average 11.7 per cent across Britain in the past year, according to research from Paragon, a buy-to-let mortgage lender.

Tenants in the South West have been hit hardest, paying almost 30 per cent more in rent than a year ago, with those in East Anglia, the North and Yorkshire reeling from increases of up to 25 per cent.

Banks turned the screws even tighter yesterday when they raised the cost of borrowing, increased rates and demanded bigger deposits. One lender, Woolwich, will require as much as 20 per cent of the value of the property on many of its popular mortgage deals - full article