Graduates 'have little choice but to rent'

While the majority of graduates have little choice but to live in rented accommodation at the beginning of their career, it is also a "lifestyle choice" for some, an expert has claimed.

Amanda Docherty, communications manager for Scottish Widows, explained that rising house prices and interest rates meant that it was becoming harder for recent graduates to immediately buy a property. Instead many have to rent for many years.

"I think in today's market, you don't really have a choice; you have to rent for a certain period of time," she commented.

"Unfortunately, that is the thick end of the problem. People are now renting and finding it harder to save for a deposit at the same time as renting."

However, she added that renting has become more popular even for those people who could afford to buy, as it allows them some freedom to move.

"For many I think it is a lifestyle choice as well, a lot of people are putting off buying until they see what the house market does [and] see if it becomes more accessible for them," Ms Docherty said.

After last week's rise in interest rates to 5.75 per cent, Nationwide claimed that increasing costs would mean landlords could expect continued demand for their rental properties.