Nearly two-thirds of people living in privately rented accommodation believe they are unlikely to buy their own home in the next five years, according to new research from Kensington.
The mortgage lender is highlighting the growing importance of the privately rented sector in a report that is being sent to politicians ahead of the Coalition Government's Emergency Budget on June 22nd.
Kensington believes the size and importance of the private rental sector means the Government has to think carefully about the potential impact of plans to increase Capital Gains Tax on the buy to let sector, which is crucial to the supply of privately rented accommodation.
The nationwide research shows 13% of people, 7.98 million, currently live in privately rented accommodation, a bigger proportion than the combined numbers who live in local authority properties or rent from a housing association.
But crucially 66% of them, approximately 5.3 million people, believe they are unlikely to buy their own property by 2015 and that figure rises to 74% for the 35 to 44-year-old age group, which is the average age to become a first-time buyer without parental help.
Pessimism about home ownership in general is high, 90% of people surveyed say they are concerned it is becoming increasingly difficult for first-time buyers in the UK, and 68% say demand for private rental property will increase in the next five years.
Keith Street, Head of Kensington, says:
"With a growing population and difficult outlook for first-time buyers the strain on the private rental sector will only increase
"It is therefore vital that there is the housing stock available to meet this demand and we - that is both lenders and the Government - need to encourage landlords to build and maintain portfolios for the long term so that tenants continue to have a choice of good quality, affordable rental accommodation to meet their housing requirements."
Kensington has launched into buy to let, with products that provide new opportunity for existing landlords to expand their portfolio.
The new products are available up to 75% LTV, with 2-year fixed rates at 5.69% and 3-year fixed rates at 6.19%.
Kensington is targeting experienced landlords who already have at least 2 buy to let properties. It will allow investors to hold up to 10 properties or £2million with Kensington, which provides real opportunity for landlords who are looking to increase their portfolio.
