by Mark Johnston
A Surge in Rental Demand.
According to industry experts, the rental sector is increasing in strength as more and more of the younger generation find themselves with little option but to enter the rental market.
It estimates that there are 4.8 million privately rented homes in Britain, up from just 2.5 million in 2002.
One in five households in the UK could be renting a property by 2016 resulting in a requirement for an additional 1.1 million rental homes, according to a new report.
It seems that current levels of occupier demand make the private rented sector the only truly fully functioning market in the UK residential sector.
The increasing demand for rented homes comes down to the increasing difficulty would be home buyers are experiencing to secure mortgages, as first-time buyers are struggling to amass the deposits currently needed to purchase their own home.
A recent report commissioned by the Resolution Foundation and Cambridge University highlights predictions of the housing market will evolve in the coming years.
It also states that if current economic trends continue, including low levels of house building, constrained mortgage finance and low income growth, families living in rented accommodation will continue to increase.
The report also projects that more families with children will be renting than ever before. The past five years have seen a massive 86 per cent increase in families with children renting their homes.
A recent report by Rightmove, the property website, found that there is now more than twice as much demand for 12 per cent fewer properties, compared with April 2009.
Therefore the fundamental laws of supply and demand will create a rise the ‘real’ cost of rent over and above inflation, which is great news for property investors, according to experts.
According to new figures from the Royal Institution of Chartered Surveyors (RICS), demand for let property is continuing to outpace the supply of new accommodation coming on to the market
The organisation’s latest Residential Lettings Survey found that, in the three months to July, 25 per cent more chartered surveyors reported a rise in demand for rented property from perspective tenants than a fall.
Recent figures from the Council of Mortgage Lenders (CML) show that £4.2 billion was lent in buy to let mortgages, which is an 8 per cent increase from the previous three months.
It therefore seem that Renting is increasingly becoming an option for those wanting to settle down in the long term without the financial stress of a mortgage. However, for this to be viable landlords must prepare themselves for a shift in the market mindset, creating rental properties that are homes rather than stop gaps for something more permanent.
David Salusbury, chairman of The National Landlords Association (NLA) believes that “the private rented sector will play an important part in helping to meet the demand for quality housing in the coming years”.
Story link - A Surge in Rental Demand.
Related stories to : A Surge in Rental Demand.