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Tenants expect rents to rise

Tenants expect rents to rise

Category: Mortgages

Updated: 14/02/2013
First Published: 07/03/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Tenants are predicting rents will rise in the coming months as demand for rental property continues to grow but supply of homes to let remains short.

Restricted opportunities for homeownership and a limited choice of properties to rent have resulted in an 'insatiable' tenant demand for rental property, according to Rightmove.

The shortage of available rental properties is most extreme in London and East Anglia.

Meanwhile, demand continues to increase as a rising number of potential homeowners are finding themselves effectively barred from buying.

High mortgage deposit requirements and concerns over job security are both playing a part in preventing people from buying.

In addition, concerns over the possibility of house prices falling and interest rates rising means a number of people are content to rent for now, and wait and see what happens.

On the other side of the market, many landlords are in limbo, choosing to let out their existing property and rent an alternative because they're unable or unwilling to sell to fund their next purchase.

With providers of buy-to-let mortgages tightening their lending criteria, many landlords are also finding it difficult to secure the finance they need.

"Letting agents in many areas are reporting an insatiable demand, with prospective tenants coming from all backgrounds and requiring all types of property," said Miles Shipside, director of Rightmove.

"Those traditional tenants that are leaving the family nest are increasingly being joined by those that can't sell or get a mortgage to trade-up, putting unprecedented pressure on the rental sector of the housing market to provide homes to rent on most rungs of the property ladder.

"Such demand inevitably creates supply shortages and pushes up the cost of the rented roof over the tenant's head."

If you're a prospective or existing landlord looking to secure a buy-to-let mortgage, we have partnered up with buy-to-let broker Openworks to help your search that much easier.

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