Undersupply blighting the rental market - Mortgages - News - Moneyfacts

News

Moneyfacts.co.uk News brings you the latest financial & economic news & reviews of the best products in the UK by our team of money experts.

Undersupply blighting the rental market

Undersupply blighting the rental market

Category: Mortgages

Updated: 13/07/2011
First Published: 13/07/2011

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 It is now over 6 months old so the content may be out of date.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 explosion in the number of people looking to rent has left landlords with a shortage of good quality properties.

Over the last three months, three quarters of letting agents have reported that they have more potential tenants than properties, figures from the Association of Letting Agents (ARLA) show.

The problem is even worse in central London, where more than eight in ten (82%) of letting agents say they have more would-be renters on their books than rental properties.

ARLA said that its members faced shortages right across the UK , as many people are choosing to turn to the rental sector because of its flexibility compared with the mortgage market.

Ian Potter, operations director at ARLA, said that the research highlights the dearth of properties in the private rented sector and that there are no signs of improvement.

It is a problem that has mushroomed in recent times; just two years ago, the number of letting agents reporting an undersupply of rental homes in the UK was 10%, falling to just 8% in central London.

"To work towards a solution, Government needs to look seriously at ways of incentivising investment into the private rental sector to increase the number of properties available for rent," commented Mr Potter.

"At the same time, it needs to look at ways of regulating what is becoming an increasingly popular housing option, so that consumers and landlords are protected from issues such as loss of rent monies and deposits as well as defaults on mortgage and rental payments."

Figures also revealed a slight increase in buying and selling activity among landlords - 16% of agents believe landlords are buying properties, up from just 9.3% a year ago.

Some 14% believe landlords are selling properties, compared with 25% a year ago.

The explosion in the number of people looking to rent has left landlords with a shortage of good quality properties.

Over the last three months, three quarters of letting agents have reported that they have more potential tenants than properties, figures from the Association of Letting Agents (ARLA) show.

The problem is even worse in central London, where more than eight in ten (82%) of letting agents say they have more would-be renters on their books than rental properties.

ARLA said that its members faced shortages right across the UK , as many people are choosing to turn to the rental sector because of its flexibility compared with the mortgage market.

Ian Potter, operations director at ARLA, said that the research highlights the dearth of properties in the private rented sector and that there are no signs of improvement.

It is a problem that has mushroomed in recent times; just two years ago, the number of letting agents reporting an undersupply of rental homes in the UK was 10%, falling to just 8% in central London.

"To work towards a solution, Government needs to look seriously at ways of incentivising investment into the private rental sector to increase the number of properties available for rent," commented Mr Potter.

"At the same time, it needs to look at ways of regulating what is becoming an increasingly popular housing option, so that consumers and landlords are protected from issues such as loss of rent monies and deposits as well as defaults on mortgage and rental payments."

Figures also revealed a slight increase in buying and selling activity among landlords - 16% of agents believe landlords are buying properties, up from just 9.3% a year ago.

Some 14% believe landlords are selling properties, compared with 25% a year ago.

Find the best mortgage rate - Compare best selling mortgages

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Homeowners underestimate remortgaging savings

Remortgaging has been enjoying a surge in popularity in recent months, and considering how much you could save, it’s a no-brainer! Unfortunately, many fail to realise the extent of potential savings, which could mean too few make the switch.

Mortgage rates at fresh lows – but it may not last

Average fixed mortgage rates continued to fall this month, however much of this could be a technical adjustment rather than an indication of ongoing rate cuts – which means it may be worth switching to a new fixed rate deal sooner rather than later.

10-year fixed mortgage market flourishes

Given upcoming negotiations on the UK’s relationship with the EU, we are expected to have some uncertain times ahead. As a result, many borrowers will be seeking long-term mortgage repayment security, and happily, the 10-year market is flourishing.
 
Close