UK housing woes are helping rents rise as would-be homeowners face obstacles to lending, job-related relocation, and an uncertain financial future. Short rental supply and growing tenant demand are renewing investor interest in the rental market and fueling an increase in “accidental landlords”. See the following article from Property Wire for more on this.
Property rents in the UK will rise across the country as demand remains high because potential home owners can’t get loans, according to one of the largest specialist residential lettings agencies.
Dorian Gonsalves, managing director of Belvoir, is optimistic about the buy to let market in 2011 as the impact of the Government’s Comprehensive Spending Review will continue to impact on the private rental sector throughout the year.
His views are supported by Belvoir’s own monthly rental index figures, which have shown a steady increase of 3 to 5% throughout 2010. The very latest Belvoir figures, from more than 140 offices nationwide, reveals an average rent across the country of £703.
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This is comparable with April, May and June 2008 when the rental market was buoyant, but is still slightly down from the heights of September 2008 when average rents reached £711.
Gonsalves says that the reasons for the increase in rents throughout 2010 was the continued national shortage of rental properties, combined with constantly increasing demand from tenants, which put upward pressure on rents.
‘The exceptional economic conditions that we are currently experiencing are predicted to continue for the foreseeable future, and means that families are becoming poorer and may have to move further afield to find employment. Potential homeowners will continue to have difficulties obtaining mortgages and saving for a deposit,’ he said.
‘With an estimated 490,000 public sector job cuts planned, the residential sales market is bracing itself to face another dip. Families on lower incomes will have dramatic benefit reductions, including the end of a council house for life policy,’ he added.
‘I think that all of these factors will result in investment landlords being attracted back to the buy to let market as they see better rental yields combined with lower purchases prices. There will also be the return of the accidental landlord who is unable or unwilling to sell their property and turns to the rental market as a viable alternative,’ explained Gonsalves.
He believes that if at some point during 2011 mortgage lenders decide to put their weight behind long term investment landlords then there will be ‘a near perfect environment for the long term property investor’.
He also believes that the Government will in the near future reconsider its position on minimum standards for lettings agents and this could result in the introduction of mandatory client money protection for lettings agents or a consumer redress system such as the TPO Scheme, which is already mandatory for estate agents.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.