The number of people looking for rented accommodation has shot up this year, with September figures 50 per cent higher compared to the same time last year, according to research from online estate agency Your Move.
The increase of those looking to rent their home rather than buy it coincides with mortgage
approvals being at an all-time low, as would-be buyers are forced out of the market by tighter lending conditions.
Many people are finding themselves unable to buy a property as lenders tighten their risk criteria, lower their maximum loan to value and demand higher deposits for the most competitive mortgage deals.
Other potential homeowners, meanwhile, are biding their time as house prices continue to come down so that they can grab a bargain when the market hits rock bottom.
Some homeowners who might have remortgaged in order to move house are finding themselves trapped in their current property by negative equity, owing more on their mortgage than their house is now worth.
The number of leases for rented properties commencing in September rose 4.34 per cent on August.
Would-be sellers are commonly opting to let their property rather than sell it in the current climate. Meanwhile, there is a simultaneous influx of demand for rented property from those unable or unwilling to purchase a house.
"As banks stopper the bottle of mortgage finance, potential buyers have to stay in rented homes for longer than they have in the past." explained Your Move managing director David Newnes.
"The lettings market is thriving across the UK – we are seeing the strongest tenant demand we’ve ever had, far beyond normal seasonal fluctuations."
Mr Newnes added that landlords are in a position to "clean up" as rental demand remains consistently strong, because, despite the wide availability of properties on the market as "disillusioned sellers become ad hoc landlords," at the same time "would-be buyers are picking up the slack. They’re biding their time in the hope that they’ll bag a bargain when the market bottoms out." he said.
BUY TO LET MORTGAGE QUOTES & ADVICE»
Because the level of supply is keeping up with the new demand for rental accommodation, estate agents expect that rent prices will remain relatively consistent, growing at a much slower rate this year than last.
© Fair Investment Company Ltd