Rising house prices 'force people to rent'

As house prices continue to rise, people will have little choice but to remain in rented accommodation, an industry expert has said.

Last week, Nationwide reported that house prices in the UK again increased by a significant amount in May - climbing 1.1 per cent to £184,070.

In the face of this upward pressure, Nigel Terrington, the chief executive of Paragon, has said that people may be forced to continue to rent. This means that he expects the market for these properties to remain strong into the future.

"The private rented sector is buoyant as demand from tenants continues to be strong," he explained.

"Many parts of the community, such as students, migrants, people on housing benefit, and first jobbers, rely on rented accommodation for their housing needs, and the sector is set to continue this growth over the next five to ten years."

Mr Terrington added that people who criticised the buy-to-let market had "overlooked the fundamental dynamic of the UK housing market" because people will always need somewhere to live, but "for many house purchase is simply not an option".

A recent study by Paragon Mortgages found that 63 per cent of landlords reported that tenant demand was either stable or growing at the moment.