Lower rental prices are providing an opportunity for tenants to get onto the property ladder, a lettings network survey has found.
The survey, conducted by LSL Property Services, showed that private sector rents are rising by an average 0.1% month on month, a slight decrease from the previous high of 0.3% over the last 12 months.
Despite this, the results showed rents are still higher in Wales than in 2012, with average property rents at £688 PCM.
With inflation predicted to hit a summer peak of around 3%, prices have been rising due to strong demand from home buyers struggling to access a mortgage.
Highlighting the problem, a recent survey by property search website Rightmove reported the average price for a house is a quarter of a million pounds, making it very difficult for tenants to get on the property ladder. Saving for a deposit is made even tougher by high rental prices.
However, it has been reported that first-time buyers have been consistently making up around two-fifths of new home purchases in recent months. According to the Council of Mortgage Lenders, May was the best month it had seen for mortgage lending since 2008.
It is thought this is due to the introduction of Government schemes, such as NewBuy and Help to Buy, helping people purchase homes with smaller deposits. The Funding for Lending initiative allows banks and building societies to borrow from The Bank of England at cheaper market rates, widening mortgage availability.
Tony Jones, owner of Penarth and Cardiff Bay-based ACJ Properties, and spokesperson for the Association of Residential Letting Agents (ARLA) in Wales said:
“The Government’s NewBuy and Help to Buy schemes have given new buyers an opportunity to get on the property ladder at a time when it is very difficult to save.
“Properties in desirable areas of Cardiff, such as Penarth and Cardiff Bay are long-term investments and the offering of low-deposit mortgages will make it easier to purchase homes.
“However, as many people are still renting long-term, it is important that they check important details when signing a tenancy agreement. In addition to ensuring the home is right for them and their family, thoroughly checking the contract and having an accredited landlord is fundamental to having a problem free tenancy.”