The rental market in the United Kingdom (UK) is stronger than ever and keeps growing, and while landlords may be making more money it is because prospective homebuyers are facing an uphill struggle to enter the market. Experts say the current economic situation is creating an entire generation of renter and there are some people who are excited about it. Those in a position to profit argue the upside is that renters have more flexibility with their income and don’t have to worry as much about job uncertainty, which is true save for the fact all of these benefits do not add up to homeownership, which is what many of these would-be renters would likely prefer. For more on this continue reading the following article from Property Wire.
A generation of young people in the UK is being forced onto the long term housing rental market because of high deposits and lack of mortgages, it is claims.
Nationwide rental agents Belvoir Lettings says that it supports the predictions of the Joseph Rowntree Foundation, which reports that 1.5 million additional 18 to 30 year olds are likely to be priced out of the residential sales market over the next eight years.
‘A depressed residential property sales market, lack of mortgage facilities for first time buyers and an inability to save for high deposits are all factors that are forcing a generation of Brits onto the long term rental market,’ said Dorian Gonsalves, chief executive officer of Belvoir Lettings.
‘Belvoir has 150 offices nationwide and many of our offices are already reporting a trend for tenants to remain in rental properties for much longer than was previously seen. As a result of this new tenants in some parts of the country are struggling to find good quality accommodation,’ he explained.
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He believes it is good news for landlords who do not have to incur costs to re-let a property and if the tenant is a good one, pays their rent on time and looks after a property really well because they view it as a family home rather than transient accommodation, they are very valuable to the landlord.
‘Long term renting is now being recognised as a viable alternative to home ownership, which was probably not the case for previous generations in the UK, although was certainly the case throughout Europe,’ said Gonsalves.
‘Renting provides tenants with the freedom they need to adapt to changing circumstances. In a world of job uncertainty tenants are now thinking long and hard about their circumstances and trying to balance the cost of renting against the problems of saving for enormous deposits, difficulties in obtaining mortgages and anxiety about future interest rates,’ he pointed out.
‘Tenants are able to budget their outgoings more easily, and do not have to worry about expensive maintenance issues, which remain the responsibility of the landlord,’ he added.
Belvoir also welcomes many of the initiatives in the recently published government commissioned review by Sir Adrian Montague, which examined the shortage of housing in the private rental sector.
‘The report suggests that the government could look to provide a number of targeted incentives to encourage the development of build to let business models, which could include sharing development risk in the short term,’ said Gonsalves.
‘Additionally, in areas of high demand for rented accommodation, the report suggests that land could be made available to developers on the grounds that a proportion of homes should be let out to tenants, with a code of standards so that tenants are aware of what standards to expect of new rental developments,’ he explained.
‘Belvoir Lettings welcomes and supports any government initiatives that will help to attract investment, ease the pressure on the rental market and provide tenants with high quality private rental homes. Demand for rental properties is extremely high, and Belvoir offices across the country are constantly seeking new properties to help meet tenant requirements,’ he added.
This article was republished with permission from Property Wire.