Why the UK rental market is booming.

24/02/2011

 

Why the UK Rental market is booming
New research has shown that the number of people looking to rent property in the UK has risen for the sixth consecutive quarter with standard house buyers still struggling to get enough money to pay for a mortgage. As a knock-on effect, homeowners looking to move up the property ladder are finding it increasingly difficult to find buyers, or more specifically, first time buyers due to the lending issues and high deposits. As a result, more and more homeowners are looking to explore the rental market, rather than wait around for buyers. A number of people already on the first rung of the property market have rented out their starter home, allowing them to move up to a larger property and upgrade without having to wait on a buyer in such a difficult market place.
Buy to let lender Paragon Group revealed its latest research showed that four out of ten landlords reported a rise in the amount of potential tenants during the final quarter of 2010, up from the 36% who said there had been an increase in the three months before that.
Only 4% of landlords reported that tenant demand had decreased during the period, the lowest level since the third quarter of 2008, and the second lowest figures since the group first started to collect the data in 2004.
As some data indicates that the average age of a first time buyer in the UK is now somewhere between 31 and 37 some may worry that the nation is slowly becoming a nation of renters. Essentially the market conditions will benefit both the landlord and the tenant as demand for better rental homes matches the increase landlords look to charge in rent. Other industry experts point to the high rental market found in Germany which has increased the quality of homes rented out, allowing people to feel comfortable remaining as tenants throughout their life.
It seems that as a nation we are reluctant to accept the move away from buying to renting but Jacqui Daly, director of residential research at Savills pointed out, “We expect to continue to see a growing number of UK tenants at all levels and from all age groups and walks of life. Renting is now considered a perfectly acceptable way of life in the UK, whether you simply can’t afford to get on the housing ladder, want to try an area before buying or need to rent out your own home while renting.”
With some areas reporting rental income up by 11%, whichever way you look at it, the UK rental market is clearly booming and most in the industry believe this will continue for some time to come.

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