Last week, news unravelled that the UK may be facing a triple-dip recession. However, it is not all doom and gloom across all sectors of the industry with letting agents recording high demands within residential lettings.
The UK’s economy having just recovered from the double-tip recession is facing warnings that it may be heading towards a triple-dip recession. Manufacturing and industrial production outputs have, against predictions, fallen to the lowest levels within 20 years. Business analysts associate the drop in production with a decreased export market to eurozone contries. The UK’s manufacturing industry is highly dependent on the European export market, and, with the eurozone crisis worsening, this market is experiencing reduced demands.
Economists are questioning whether the UK will be able to meet the heavily scaled down economic forecasts presented by the gouverment last week. Further to the decrease in manufacturing, poor levels of economic data for services, construction and trade have created doubts in the UK’s ability to fulfill the economic forecasts.
The housing market is showing a variable profile. The gouverment’s plans to make greenfield site more readily available by changing related rules and regulations may achieve a desired boom in new housing stock. However, with the widespread opposition, it is unsure whether planning regulations with regards to greenfield sites will be loosened.
High credit charges on mortgages and the difficulty of securing a mortgage in the first place, seem to still to constrain potential buyers to purchase homes. With less people being able to afford to buy a property, increasingly more people are looking to rent. Traditionally, people in the UK looked for residential lettings as an interim solution whilst saving for their first home. However, increasing numbers of people are seeking residential lettings as a long term solution. Furthermore, people are concerned about purchasing a home in a housing market where prices may further drop. Looking at the latest statistics, this trend has resulted in a 1.2% drop of sales.
Consequently, the buy-to-let sector, and in particular residential lettings, has grown in size. Letting agents across the country have recorded an increased demand of affordable lettings. However with the increased demand of residential lettings, prices have been rising. Manchester letting agents, for example, have seen up to 30% price increases for citylets within the most sought after locations.
Whether one is looking to buy or to rent the Association of Residential Letting Agents (ARLA) can provide some useful advice for both potential tenants and landlords.
This article was written by Thomas Smith on behalf of www.wrenproperties.co.uk – letting agents in Manchester to look after buy-to-let properties.