A blog about property and Northern Ireland from the team at PropertyPal.com
The crunch for many means that demand for rented accommodation is at an all time high. There are a few occasions in life when you will not only be renting a home, but you may also be living with complete strangers. If you are in the unenviable position of being a single someone, or a group of students who only need to sublet one room, picking your flat mate is akin to picking your other half – fraught with pitfalls!
With all the talk of recession and focus on the economic downturn its hard to believe anyone can be benefiting from the difficulties in the property market.
However figures published show an increase in the number of properties for rent but a decrease in the average rent. With many sellers unable to sell their properties, it appears they are being forced to join the increasing number of landlords. This increase in rental properties has resulted in a reduction in rents despite the fact that the number of prospective tenants has also increased.
Although Landlords generally look for the costs of buy to let properties to be covered by rent, the effects of supply and demand on the market place means that this may not be possible in the current climate.
Whilst industry experts claim the largest drops in rental prices are at the top end of the market place, figures for the last quarter reflect a 4.2% drop in the market overall. Experts have expressed concern at the effects this will have on an already dwindling property market. Demand for purchasing is generally stimulated when the cost of a mortgage is more financially beneficial than the cost of renting. With the difficulties in obtaining mortgages and affordability issues, the benefits of renting may be higher for the foreseeable future.
Source: The Guardian
According to one of the UK’s largest letting agents, demand for rental properties is up as much as 50% on last year. Industry experts state that this is hardly surprising in light of the difficulties in the property market at present.
Reports indicate that more than a quarter of young working households are unable to get a foot on the property ladder due to mortgages being unattainable and house prices still remain unaffordable for most.
The boost in the rental market is, for many estate agents, now their staple income. Agents who have historically avoided the rental end of the market are now relying on lettings to keep their doors open.
It is also hoped that the increase demand for rentals will add a much needed boost to the property market by increasing the buy-to-let end of the sector. Skeptics feel that with buy to let mortgages becoming ever increasingly expensive and difficult to obtain, the demand will have little impact on sales. Concerns have also been expressed that buy to let investors have in the past concentrated on homes that would have been suitable for first time buyers. The first time buyer market is crucial to feeding the entire market place and many feel that this is were any real progress will have to start.
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