No direction home for renters

There has been a sharp decrease in the number of people moving from rented accommodation to newly purchased property.

According to research from MoveMe.com, the number of people moving into their own home has fallen by half during the first half of 2008.

In contrast, the number moving from one rented domicile to another has increased by a third.

It is thought the motivation behind both trends has been the sharp correction seen in UK house prices.

"While people are still moving, the increase in the number of people choosing to move between rented accommodation is a reflection of consumers’ lack of confidence in the property market and current affordability constraints," explained Keith McNeilly, co-founder of MoveMe.com.

"Potential first-time buyers who previously would have been the largest group moving from renting to buying, are now delaying a purchase as an uncertain market and tougher lending criteria is making it harder for this group to step onto the property ladder – a trend that is likely to continue for the rest of 2008."

Research from the Royal Institution of Chartered Surveyors (Rics) published today shows transaction levels in the UK market have now fallen to the lowest level since 1978.

However, this sharp fall has not yet resulted in homeowners moving into rented accommodation in a long-term attempt to upgrade, according to MoveMe.

The company's analysis finds there was no change in the percentage of people moving from owning a property to renting in quarter one of 2008.

In fact, the research indicated those already established on the property ladder showed no signs of leaving the market, with those selling their current home and then buying a new property increasing for 2008.

"The fact that those already on the property ladder are choosing to remain so is good news for the property market," concluded Mr McNeilly.

"It demonstrates that overall, the majority of home owners still view property as a good investment and are confident that the market will improve over the long term."

Chris O'Toole