The power hour


mBe 2011 Power Hour: to buy or not to buy?


House prices are falling, mortgage finance is scarce and regulation looks set to shut many people out of the owner occupier market. Is it a good time to buy or should the UK should put the breaks on its love-affair with bricks and mortar?


Thanks To falling house prices borrowing is much easier for Those who have a large deposiT buT whaT are The implicaTions for Those who don’T? John Heron: The market we have today isn’t really about renting versus buying. Recently we’ve seen super- charged demand for the private rented sector driven by the absence of finance, the fragility of the economy and increasingly by regulation. But for the last 20 years we’ve had a housing market and society where tenure choices are changing. There are 3.1 million homes renting now compared to 2.1 million 10 years ago – a 50% rise. It’s not merely the financial crisis that has driven that growth, it’s much more deep rooted economic and demographic change. Currently around 14% of homes are in the private rented sector, which could grow to 17% in the next five years. I don’t think the mortgage famine is the main driver of this growth. Alan Cleary: Buying versus renting is only a relevant question for a very specific set of people. You can’t ask


36 mortgage introducer FEBRUARY 2011


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