Wednesday, Sep 15, 2010
Rents on the up?
MortageStrategy: Landlords struggle to meet demand for rental property
The future looks bright for the buy-to-let sector as demand rises but there is a sting in the tail. The number of new tenants signing up for rental property hit a new high in Q2 according to Countrywide. And a record 20,000 new entrants were welcomed to the rental market in July. This increased demand is in stark contrast to the number of rental properties coming to the market. Excess demand has pushed up average rents, with four-bedroom family homes seeing the greatest price rise of 4% compared with Q1 to reach £1,090 per calendar month. But the bad news is that landlords are struggling to find the financing to take advantage of increasing tenant demand and rising rents.
Posted by drewster @ 08:42 PM (1306 views) Add Comment
15 Comments
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1. Yoss said...
As the number of 5+ bedroom homes hitting the property market hits an all time high?
2. estrader said...
What an absolute skip load of VI Horlicks. My rental agreement has come through for renewal - no change and I can sign up for 12 months. I've seen more and more to-let signs going up around my area as well. These people try to ramp up property any way they can.
3. the number cruncher said...
Advertised rents are up well over 20% for rentals on rightmove around my area since last year. I was playing football with my boy and some of the other kids on the green on Sunday and I was chatting with some other renters in the village, and they are very worried their houses are about to go on the market, and talking how much the rents are for the couple of properties on the market for rent.
Tons of property on the market for sale, but all at near peak prices. I noticed the BTL Mafia in nearby Ashford, including our favourite ex-maths teachers the Wilsons, have not budged on their advertised price all year.
We are still in Mexican stand-off territory
4. estrader said...
I see asking prices drop in my area, I see no change in rental prices in my area. Other people see the very opposite in their own area - makes me wonder what 'The' property market actually means. Give me the stock market any day!
5. str 2007 said...
Rents poss up a tiny bit in Hampshire but now things taking alot longer to let out so actual rent achieved including void period is no different
6. mark wadsworth said...
There are a fixed number of young people - in the good old days, a lot of them would be first time buyers, but the number of FTBs has halved (or whatever) and there has been a corresponding increase in renters. But it's the same number of people in the same number of properties so overall there is little impact.
7. uncle tom said...
Rising rents do little to encourage landlords when capital values are in doubt.
But rising rents will contract demand, and less demand means lower capital value..
8. Simon said...
The Number Cruncher @2
How can the BTL mafia hold out so long ?
If the trend in sale prices is down rental prices must follow and the longer they leave it the worse it will be for them .
9. Si said...
Mark,
True but this does not take into account the transient effect of droves of houses/flats normally for rent being put on the market, temporarily reducing the number of houses in proper use.
Maybe another wave of places formally for sale will go back on rent surpressing rents again, just like last dip, ... I hope!
10. sureseam said...
Simon @ 8: How can the BTL mafia hold out so long ?
Well, interest rates haven't started rising yet. That is usually the turning point.
If Nick and Dave don't get the austerity trick right then we can expect to see interest rate rises before Christmas.
11. drewster said...
mark wadsworth @ 6,
Actually the supply of young people varies quite a bit. The baby boom and its echoes have left clear waves in the population figures. Take a look at the ONS population pyramids online - the 20-24 age group is bulging at the moment (figures are from the 2001 census, when it was the 10-14 age group that was bulging). Also most of the Poles and Latvians of recent years have been young and renting.
As for rents in general, most people I know who have been looking recently have seen pretty sharp rises, especially in London. Obviously my sample size is too small to put a percentage on it, but anecdotally it's more than 10% rises.
Census 2001 figures (add 9 years and a whole lot of Eastern European migrants to get today's figures)
12. drewster said...
Graph to accompany previous text:
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