Focus: The renters

Andre Douglas, 31, a scientific officer at a local council, Cambridge

Andre saw the potential for the current downturn in the housing market when he was house-hunting in Cambridge with his fiancée two years ago.

"We were putting in offers at the asking price and being knocked back," he recalls. "We got pretty disillusioned as it was clear there was a lot of big money from buy-to-let and cash buyers who were active."

He now pays £800 a month for a three-bedroom semi-detached house with a garden in the university town. He would have been looking at monthly repayments of between £1,000 and £1,300 to secure a property two years ago.

Now the surge in mortgage rates in the wake of the credit crunch has made buying even less of an option. "We are glad to be on the sidelines," says Douglas.

Fortunately, his landlord has indicated he is happy to continue to rent out the house. Douglas is using the opportunity to pay off other debts and allow the deposit to earn current high levels of interest while he monitors the property market.

"It is a question of wait and see," he says. "Will it be like 2005 [when prices dipped and rebounded] or a crash like 1990 and 1991? The news is changing week by week but nothing is happening that is making me say 'let's bring forward the day of buying'."

James Acreman, 28, marketing executive, London

When James moved to London after 18 months' travelling to take up a job as a marketing executive, it didn't even occur to him to buy.

"I have got a good, well-paid job but to get the quality of accommodation that I would like and to be able to afford somewhere to buy in zone two [for the Tube] was not possible," he says.

"I really did not see buying as an option because I had just got back from travelling. I did not have a deposit saved up and I was not interested in a 100 per cent mortgage, so renting was my only option."

He pays £550 a month excluding bills in a house that he shares with three other people in Brixton. Even a one-bedroom ex-council flat would cost around £180,000, which would cost him £875 a month for a 100 per cent interest-only mortgage.

But it was more than just the money. "I like the flexibility of renting and not being tied down by a mortgage," he says. "I have friends in Southampton where I am from and they have got mortgages and I say 'Why not join me in London or go travelling?' and they say 'I would but I've to pay the mortgage'."

He describes his house as a good quality property with a garden, a decent fitted kitchen, wooden flooring throughout and broadband access. "It is not as good as a family home but I have been through the university accommodation slums. Compared with that it is fantastic," he says.

Given the level of mortgage rates and the possibility of further house prices falls he does not expect to get into the property market. "I'm happy to carry on renting for the foreseeable future."