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Housing market slump end nearing?

Housing market slump end nearing?

Category: Mortgages

Updated: 16/06/2009
First Published: 16/06/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
The bottom of the housing market slump could well be in sight, after research revealed rents stabilised in May while house prices increased. With conditions in the house sales market improving, some reluctant landlords have started to sell their properties, according to smartlandlord.co.uk.

At the same time, many prospective first time buyers are still being excluded by restrictive mortgage criteria and a new generation of graduates with guaranteed jobs beginning to search for accommodation, meaning demand for rented homes is threatening to outweigh supply for the first time in months.

The long term value of the housing market is adjudged to be positive, with rising demand for rented property predicted across the board.

As a result, many landlords who can raise the finance are now looking to expand their portfolios. "This is the perfect time to snap up bargain properties that over the long term will yield great returns," said Keshav Thukaram, managing director of the website.

Landlords have been urged to remain cautious, however, as the rental market is currently made up of consumer groups considered to be risky. Almost six per cent of new tenants are students, up from just 1.1 per cent a year ago.

Furthermore, 7.8 per cent of new tenants in May were classified as unemployed, with a further 7.7 per cent being self-employed.

"Research into the right area and the right property has never been more crucial," Mr. Thukaram commented.

"And in the current environment, most landlords would be wise to take out insurance against loss of rental income, particularly if their properties are in areas of high levels of unemployment."

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