The Money Stop

Over recent years consumers that were looking to rent a home in the private sector often found that the properties were being snapped up before they even had a chance to arrange a viewing, leaving them to start from scratch and select another property from the limited choice available. However, with the problems that have hit the housing and mortgage sectors recent figures show that a rising number of rental properties in the private sector are coming onto the market.

This means that those looking to rent a home could find that there is greater choice available. However, on the downside the problems in the mortgage market, which have resulted in fewer mortgages being available and access to mortgages being restricted, means that there is also a greater number of people looking for a property to rent because they cannot get the finance that they need to get onto the property ladder themselves.

Officials have said that one of the reasons behind the growing number of rental properties coming onto the market is that many homeowners who are looking to move out are simply unable to sell their homes, and instead are putting them on the market to rent.

Many problems have affected house sales, which have plummeted to their lowest level in decades. Falling house prices have put many buyers off from taking the plunge in case prices continue to fall and leave them facing negative equity. Lack of mortgages and restricted access to mortgages due to tighter credit conditions has meant that many others are unable to buy at present. Also, the government’s indication that stamp duty may be suspended for many first time buyers has resulted in an increase in the number of potential buyers that have decided to take a ‘wait and see’ stance.

According to the Royal Institute of Chartered Surveyors July saw new instructions from landlords rise at the fastest level on record, and more and more desperate homeowners decided to give up on trying to sell and put their home on the market to rent out instead. However, the report from RICS also indicated that the number of potential tenants is higher than the number of landlords, and this is resulting in rents being pushed higher in many areas.

One official from the Royal Institute of Chartered Surveyors stated: “Frustrated vendors have been placing their property in the market to let as they have been unable to agree sales due to a lack of demand in the housing market. Many would-be buyers have been forced to rent as the route to mortgage finance has been blocked.”

However, other industry officials have said that if the number of new landlord instructions continues to rise in this way the number of rental properties may start to outweigh the number of potential tenants, and that this could result in rent costs coming down by up to 5% in some areas.

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