Buy-to-let booms in 2008
Landlords pick up the slack from weaker housing market.
Demand for rented accommodation in May has boomed 41% year on year according to new data from an estate agent, a leading UK lettings agent. Lease commencements were up 41% in May 2008 from May 2007. Tenant demand increased month on month as well - the number of leases commencing in May 2008 rose 14% from April 2008.Managing Director of a national estate agent, David Newnes, said: “Mortgage finance is hard to come by these days – the rental market is definitely picking up the slack. And we’ve seen a considerable number of would-be buyers put house purchase on hold because of the squeeze on their finances. They’re turning to the rented sector while money is tight.”
May’s increase in tenant demand is part of a wider trend. In April 2008 the number of leases commencing was 56% higher than the year before. The number of leases commencing in 2008 in total is up 34% on the same period in 2007. Month on month, there has also been a steady increase in tenant demand from March this year.
David Newnes continued, “There has been a significant rise in the number of people looking to in the past few months. Banks and building societies are tightening their loan criteria and raising their fixed rates week in, week out – people who would have fallen into the first time buyer bracket a year ago are now renting.
“Buy to let will grow this year. Opportunities to invest are ripe for professional landlords able to secure financing. With rising tenant demand comes rising rents - buy-to-let yields will consequently improve. House prices are under pressure at the moment, and there’s scope for buy-to-let investors with collateral to get good deals to expand their portfolios.”
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