A new survey suggests that over three fifths of landlords say private renting is becoming less attractive as an investment option.

The survey – of 500 landlords by the Yorkshire Building Society – says a critically short supply of private rented housing could leave those needing help most stranded, as the findings suggest those landlords disenchanted with buy to let currently serve couples with dependent children (34 per cent), single parent households (18 per cent), the low paid (nine per cent) and those with disabilities (four per cent).

However, the majority of private landlords say they are still committed to doing their bit to stem the shortfall, with two thirds intending to stick around for at least five years. Almost two fifths, though, say the government should do more to support the rental sector in light of changes to regulation and taxation which are making it harder for them to operate profitably.

The survey was part of the building society’s Home Truths report, which also surveys 500 first-time buyers and 500 remortgagers.

The results show that the increased cost of living, historically high house prices and interest rates at levels last seen almost two decades ago are the main reasons people are struggling to invest in bricks and mortar. 

But almost two-fifths of first-time buyers planning to purchase in the next year – over half would like to stop wasting money on rent; almost a third plan to renovate and create a ‘place to call home’; and around two-fifths want eventually to buy as an investment. 

When it comes to mortgages, the growing minority of borrowers don’t fit the ‘vanilla’ mould, as a result of changing societal dynamics. 

Therefore, almost four in five first-time buyers and nearly as many remortgagers indicate that homeownership is becoming an elite privilege, due to factors like the changing make-up of income and rising house prices.

Ben Merritt, director of mortgages at Yorkshire Building Society, says: “The reality is that family structures are changing due to things like greater life expectancy prompting a rise in multigenerational living. More people are working for themselves, or employed as contractors, meaning they have unstructured incomes; while factors like the shift to hybrid working following the global pandemic are changing what they want from a home, and therefore their borrowing needs.

“As a mutual building society, this means we have come full circle, and are stepping in to provide outside-the-box solutions – just as we were set up to do back in 1864. We’ll continue to rise to the modern-day challenges by innovating to offer today’s borrowers suitable pathways to home ownership.”

The findings also highlight that consumers are making significant changes to overcome the affordability challenge and get a foothold on the housing ladder, with almost nine out of 10 making responsible lifestyle choices to prioritise the biggest investment most of them are ever likely to make. 

Of these, over half were prepared to forego holidays, half eat out less and two-fifths buy less new tech. Almost all first-time buyers surveyed were saving towards a deposit, expecting that to take them four-and-a-half years on average.

Other examples of how people are adapting include buying homes later and looking to pay them off over a longer period of time – the average age of first-time buyers taking part in the research was 35 and 58 per cent of them confirmed they would be buying a house later than intended as a result of the current economic climate. 

Furthermore, seven in 10 mortgage holders are considering extending their mortgage terms – four-fifths of those into retirement, with an average age expectation for paying them off, of almost 70.

Seeking financial support from parents was an option for almost a third of first-time buyers and from wider family members like grandparents, aunts and uncles for one in 10.

Merritt continues: “If ever the industry needed a burning platform, the findings in the report are it. We’re determined the progress we’ve made over the past century-and-a-half shouldn’t be lost. Ground-breaking modern solutions are needed from lenders like ourselves, and other industry stakeholders including the government, to ensure the mortgage and housing markets continue to meet the needs of current and future generations.

“It’s encouraging, after almost two decades of unusually cheap credit have likely led to some less responsible spending habits, that people are starting to take the financial commitment homeownership represents more seriously, and cutting their cloth accordingly. These good financial habits will stand them in good stead in all aspects of their lives.”