Good news for landlords! According to the Association of Residential Letting Agents (ARLA), tenant demand for buy-to-let properties is rising as the surplus of rental property is reducing.
ARLA's research has shown that a trend of "reluctant tenants" have hit the UK housing market, following a change in supply and demand for rental properties.
These reluctant tenants have surged onto the market due to the fact that they have been been forced to sell their homes and rent property instead. Many homeowners have sold their properties in 2009 due to a job move been forced to join the rental market due to homeowners being forced to sell their home during 2009 and struggling to find the right property and mortgage.
During Q4 2009 an average 41% of members surveyed reported more tenants than properties - compared with just 24% last quarter. In addition, ARLA research among landlords revealed that 54% of those asked felt that consumers were being forced to rent rather than buy.
The UK housing market is experiencing a trend of ‘reluctant tenants', following a shift in supply and demand for properties, according to the Association of Residential Letting Agents (ARLA).
ARLA's research, conducted across UK letting agents and landlords, reveals that the surplus of rental property is reducing, while demand for properties rises.
According to ARLA, this shift has generated a wave of reluctant tenants.
"New tenants include those homeowners who were forced to sell their home during the last year either due to financial instability or a job-move. And many people now in a position to buy are struggling to find the right property, as there is also a shortage of both properties for sale and realistic mortgages," explained Ian Potter, operations manager at ARLA.
"This rise in tenants is a positive sign for the industry, as it indicates increased market movement," continued Mr Potter. "It also shows that many more people will learn the benefits of living in rental accommodation.
"However, as demand exceeds supply we are faced with a new challenge - how to provide enough good-quality rental properties to meet this demand. These figures confirm our long-held view that a strong Private Rented Sector (PRS) will be fundamental in meeting the accommodation needs of future generations. But without significant government support, the sector will likely struggle."
In August 2007 53% of ARLA members surveyed felt that there were more tenants than properties - but this figure then dropped, reaching a low of 10 per cent in February 2009. The number of available properties began increasing again last quarter.
ARLA research for the fourth quarter also shows that the period for which properties are unoccupied has fallen once again, with the average void period for the UK down from four weeks to 3.9 weeks, as tenants snap up available properties quickly.
Published on: June 2, 2008