Rental demand from tenants high
- 13th August 2008
- Landlord Property News
Landlords are experiencing their strongest demand from tenants requiring rental property in decades.
Research carried out by Your Move has shown there was a 38% increase in lease commencements from the start of the year to June, on top of a 3% increase in May and June alone.
With a tighter lending criteria in place from banks and building societies running hand in hand with higher utility bills, many people are adopting a wait and see policy with regard to buying property. The consequence of this is unprecedented demand from would be tenants.
David Newnes, managing director of Your Move, says: "Mortgage finance hasn't been this hard to come by for 15 years. For landlords this is a cloud with a gold-plated lining."
He continues: "The criteria banks and building societies use for deciding how much you can borrow have got a lot tougher. People who would have fallen into the first time buyer bracket a year ago are now renting."
There is however a word of warning for Landlords to keep an eye on tenants finances to ensure they don't fall into arrears. Moneyexpert.com has said that those in rented accommodation spend up to 13% of their weekly disposable income on energy compared to 5% among homeowners. The main reason for this is that tenants are more likely to use more expensive prepayemnt meters and are less likely to switch to cheaper energy providers.
Mike Keating, managing director of personal loans intermediary at AXA, comments: "On the surface it looks like the rental market should be buoyant. But if you consider that many of those renting may be struggling to make ends meet it's certainly not all good news for buy-to-let owners."
For landlords this is a cloud with a gold-plated lining.
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