Landlords become sellers, tenants see rents rise
More house sellers in the UK are selling up, emboldened by the recent stabilization and rise in house prices.
[ClickPress, Fri Sep 04 2009] More house sellers in the UK are selling up, emboldened by the recent stabilization and rise in house prices.
Many of these sellers have been “reluctant landlords” – that is, homeowners who chose to rent out their house rather than sell it at a loss during the property slump – and are now feeling sufficiently encouraged by the signs of recovery and increase in demand to put their house on the market.
For tenants, this means fewer homes available for rent and a concomitant rise in rents, as seen in several recent surveys. Rents in England and Wales rose by 0.5% in July compared with June – the fastest rate in a year, according to letting agent LSL Property Services. Rent levels were rising fastest in London and the southeast.
Findaproperty.com found that the average UK rent in July (£829 per month) was £4 higher than in June. This was the third consecutive monthly rise and the highest level for six months. (In the bigger picture though, average rents across England and Wales were 4.5% lower than at their peak in August 2008.)
The number of homes available for rent fell by 16% since February, reported property website Finadaproperty.com. But while the demand for houses was increasing, there was still an oversupply of flats, with 13.4% more flats available now than six months ago.
While many “reluctant landlords” will be eager to sell up, the picture for prospective buyers hasn’t improved much, especially for tenants looking to get onto the housing ladder as first-time buyers, as mortgage conditions are still tough and very large deposits (of 25% to 40%) are still required.
While the property market is certainly moving in the right direction, financing obstacles will continue to hamper homebuyers (and frustrate sellers), and it is only when banks begin to loosen lending conditions that the market will be able to head for a genuine recovery.
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