In a lackluster residential sales marketplace where many homeowners have had to rent properties to hold on to them, there are signs of some easing in the rental market. Buoyed by the Olympics, rents in the 2nd quarter rose well above prices at the beginning of 2012 but then appeared to settle lower in July and August before trending higher in September.
Overall, residential rents in the UK have increased about 2 percent or £20 per month through the third quarter. This data is collected from a site called the LandlordZone and was posted on October 12, 2012. This Rental Index is based upon weekly data that racks more than 150,000 advertised rental properties across England, Wales and Scotland.
Robin King, A Director with Move With Us explained, “The index confirms a consistent and increasing demand for rented properties across all regions. Many aspiring homeowners struggle to qualify for mortgages which is leading to increased demand in the rental sector. These long-term renters are demanding higher quality accommodation and look to stay for much longer than we have previously seen.”
Tight Mortgage Market Pushing Rental Market
Adding to the demand of residential rentals is the tightening of mortgage lending policies. Many potential buyers do not qualify for mortgages that they would have had no difficulty procuring a few years ago. First-time buyers are especially tested. What has resulted is an abundance of long-term tenants.
The rental market in London reflects ample demand and a hangover from the Olympics. In the third quarter, reality began to kick in as the average price stabilised at £2,270 after reaching highs of £2,411 in June.
Yorkshire and Humber Hot Areas
Yorkshire and Humber rental rates are stable and appealing. The average rent of £602 by the end of September represents a 7 percent increase over 2011, but is still one of the most popular places to rent. According to letting specialists, the popularity of these areas is attributed to availability of rental homes in what are normally ownership developments. This availability has sparked the 7 percent rise in rental values.
Letting specialist project further rent increases in these areas in the fourth quarter. Agents are quick to point out that a number of factors can set the market back. Among the biggest detractors are the cost of energy, continued wage instability and high fuel prices.
While rental rates in London have settled, they still average about twice as much as the national average. Rental agents fear that energy prices will soon drive London’s rates lower.
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Bannisters Property Management specialise in the UK property market, providing specialised services for both Landlords and Tenants in Bicester and Aylesbury.