A lettings specialist is claiming there is no better time to be a landlord and advises homeowners struggling to sell a property to rent it instead.
But Andrew Youd, area manager for Andrews Letting & Management in the South East recognises that the market still has its challenges. Only 18 months ago the lettings arena was crying out for tenants and headlines shouted about rents falling.
But now the two main reasons for this drop in available property, claims Youd, are that landlords are selling up and there is a lack of new landlords coming into the market.
The impact of this has been to see the withdrawal of a large proportion of housing stock from the market.
Added to this, market conditions have meant that it is difficult for new landlords to buy into the market, or for existing landlords to add to their portfolio.
The availability of buy to let mortgages has decreased dramatically and those that have been able to secure one have found they need to stump up a sizeable deposit. However Youd believes demand is still there as, although house prices have fallen from their peak in many areas, they are still unaffordable for many first time buyers, who tend to rent for longer than they did a decade ago.
Mortgages for residential buyers are also scarce unless you can raise a large deposit and some people are choosing to rent because they are not certain which way the housing market is going to head in the short term.
Youd said: “There are many sellers out there who are struggling to sell at the price they want, or whose chains have fallen through for some reason.
“Often they still want to move and renting out their property could enable them to do this. Because of the current high level of demand this option is going to be even more attractive than it has been in the past.”
• Nearly half of all tenants are expecting rents to rise in the next 12 months. At 45 percent this figure is up 12 percent on this time a year ago.
Rightmove’s latest quarterly survey of the private rented sector also shows that available rental stock held by agents has dropped 20 percent over the year.
Just over half of tenants would like to buy, but cannot afford to do so.
Miles Shipside, commercial director of Rightmove, said: “Many renters are caught in a ‘rental market crossfire’, taking financial hits from all directions.
“Not only can they not afford to buy, but they are about to feel the pinch as rents look set to rise too.
“As well as being negatively impacted by the new Government’s austerity measures, they are likely to have to compete harder and pay more for the dwindling choice of rented accommodation.”
But he said that landlords had also been caught by tight lending conditions, meaning that those who would like to add to their portfolio are unable to do so.
