New tenant applications rose 37% last year compared with 2009, Countrywide has reported. In contrast, the supply of properties available to let fell 29%.
Figures from Countrywide’s mortgage division also show that the biggest growth area of lending growth in 2010 was applications for buy-to-let mortgages: they rose 22%.
Grenville Turner, chief executive of Countrywide, said: “The continued challenges faced by home buyers to gain mortgage finance is likely to see more people turning to the private rental sector this year. Despite the increase in buy-to-let lending, supply remains significantly lower than demand, with an average of 4.5 tenants vying for every available property in 2010.
“During 2009 there were 2.3 tenants for every available rental property, which demonstrates the upward shift in demand we’re experiencing. This could soon reach critical levels as limited mortgage availability continues to stifle the market and the impact of the Government’s austerity measures on social housing and employment kicks in.”
Meanwhile, LSL – parent company of Your Move and Reeds Rains – reported that rents dropped in December by 1.2% to an average of £684 per month.
Despite the decrease, rents in December were 3.8% higher than the previous year. More worryingly, however, LSL said that 11.7% of rent in December went unpaid – a total of £276m – and a rise from the 9.7% that went unpaid in the previous month.
The British Property Federation said that much of the unpaid rent would have been owed by housing benefits tenants in receipt of Local Housing Allowance, and it repeated its calls to have the allowance paid direct to landlords.
Ian Fletcher, director of policy at the BPF, said: “Christmas is an expensive month for all. But Christmas should not be bankrolled by tenants not passing December’s rent on to landlords.
“The Government persists with a policy that was designed to empower LHA claimants, but the truth remains that millions of pounds of taxpayers’ money is being wasted and not finding its way to the landlord.
“There is already growing evidence that landlords are shunning LHA claimants.”
Comments
Comments from Corporates that rent , or not as is more the case, loads of buy to lets in receivership, poor stock, poor agents, poor data- we are finding the reverse but do not have a huge PR machine to drive column inches talking rubbish but as bad news gets coverage.
Quite correct. Its ridiculous scaremongering, and often at these times the worst scares create the best opportunity. I first bought at £25,000 when similar commentators spoke of property not recovering for 50 years....IT doubled within the next few years.
What these pundits don't address is the fact of supply and demand in housing, where the demand is stronger than its ever been and likely to continue.
Any idea that rents fall is simply silly, as your comment would prevail. Likewise I don't believe property prices will fall by much, although I do believe some want us to believe that, but as ever they will be the first ones using their money to buy up whilst telling us of the weakness in housing.
The fact is we don't have enough properties, and governments have tried many tricks to ease the problem, and likewise can't afford council houses, hence the move to housing associations, and where we can't afford housing associations for the misnomer that we call 'affordable' homes, but which ironically are anything but affordable to HMG or taxpayers, and if anything create more problems than they solve.
A seasonal 1 month fall from a single customer hardly justifies the headline that rents are starting to fall.
There has been much discussion surrounding the inflationary pressure on both sale and rental prices, the content of the article supports that evidence and notes an annual increase which outstrips inflation.
Rental yields will be the next thing to add to the rent inflation pressure, BTL Landlords with little or no capital increase to look forward to and yields that will all short of interest rates will simply give up renting or be less philanthropic with their tenants.