Demand ‘shifting to rental homes as would-be buyers wait for more certainty’

Rental sector inquiries have jumped as some would-be home buyers take a pause, according to a property website.

The number of people inquiring about homes to rent was 23% higher in October compared with the same month in 2021, Rightmove said.

Mortgage rates jumped following the mini-budget in September, but there have been some signs of rates edging back down recently.

Earlier this week, Moneyfacts.co.uk reported that the average five-year fixed mortgage rate had dropped below 6% for the first time in seven weeks.

Bank of England base rate hikes are also pushing borrowing costs up and rising prices generally may also make it harder for people to raise enough cash for a deposit to buy a home.

Some potential home buyers may also be sitting it out for a while to see what happens with mortgage rates and house prices in the months ahead.

A Rightmove survey found two-fifths (42%) of aspiring first-time buyers with plans to get onto the ladder in the next few years already had their total deposit saved.

The website said this indicates there is a group of future first-time buyers waiting in the wings to enter the market once they feel like they have more financial certainty.

A survey among letting agents meanwhile found that on average they are managing 36 inquiries per property.

Tim Bannister, Rightmove’s property expert said: “It’s completely understandable why some buyers, particularly some first-time buyers, are waiting for some more financial certainty.

“Now that there are signs that mortgage rates are settling down, the indicators are that they will stabilise at a higher level than previous buyers had been used to.

“If someone has their deposit saved and is ready to move, they may find that right now presents a better opportunity than a few weeks ago, particularly with more choice coming onto the market and some sellers pricing more competitively in the lead up to Christmas.”

Amardeep Lall, head of lettings at Manning Stainton said: “If a prospective tenant can share as much information as possible at the start of the process with us, it greatly helps us to find somewhere for them more quickly, and it can put them at the front of the queue for properties that become available.”