7 August 2014
YORKSHIRE residential letting specialists Linley & Simpson is warning that the market will face unprecedented challenges in 2011 unless more rental properties become available.
New figures reveal that on average a record nine applicants are registered for every home it has on its database and it is predicting that this gap will widen as more and more people turn to the benefits of renting.
And viewings on rental properties are already up 300pc in January compared to Decemb
The agency which has offices in Harrogate, Wetherby, York, Ilkley, Wakefield and three in Leeds is calling on banks to free up more funds to enable investors to develop their buy-to-let portfolios, and Government to launch initiatives to encourage more investment into the Private Rented Sector (PRS).
The PRS has an increasingly important part to play in the future of housing in the UK. With more and more people excluded for home ownership and a reduction in availability of social housing, the PRS is predicted to increase from 14% to 17% of overall housing within the next five years. At a time when there is very little supply of new properties into the PRS, the rental market is going to come under ever increasing pressure.
The British love affair with home ownership seems to be over buyers can't buy and sellers can't sell and renting has come to the forefront of the property market, said director Will Linley.
The situation is a ticking timebomb that is unprecedented in our 13-year history. Unless there is an influx of extra properties to satisfy this demand, it's inevitable that the market will find itself stretched towards crisis point later this year.
He added: Overcoming the current shortage of properties is the biggest challenge that the market has faced but it is not something that it can solve on its own. The Government and the banks need to recognise and work with the PRS to help find solutions.
There has never been a better time to be a landlord, or thinking about becoming one tenant demand is at an all-time high, void periods are at an all-time low, and monthly rents are rising. There is no shortage of incentives for landlords to invest.
Among Linley & Simpsons predictions for the Yorkshire rental market in 2011 are:
The number of tenants will continue to rise month-by-month - on the back of tighter mortgage lending, falling house prices and rising job insecurity, especially in the public sector. This will be particularly the case among younger people. The average age of a first-time buyer is set to reach 43 years and the average deposit required for house purchase soaring past the £30,000 mark. Rising divorce rates will also see a rise in lets among single people.
Monthly rents for properties in sought-after areas will continue to increase. Increases of between 5% and 10% are likely to be more commonplace, although it is unlikely that 'sealed bids', which have controversially returned to some parts of the UK, will be witnessed in Yorkshire.
More people will follow the Continental trend and rent for longer. The agency reports a rise in the number of people seeking the security of long-terms lets. Although UK home ownership has fallen to its lowest level in 20 years, it is still around 50 per cent higher than countries such as Germany, where renting is the norm rather than the exception.
The natural 'churn' of properties becoming vacant each month will fall. More tenants are choosing to 'stay put' and not move adding to the lack of availability. Out of a portfolio of several hundred properties, one branch reported just one changeover of tenancy last month.
Properties will be snapped up more quickly. The average time that homes are marketed on some of the leading websites, such as Right Move, are now at an all time low. This will ensure that costly void periods for landlords, when their properties are un-let, are virtually non-existent.
Rental yields will remain high. The rate of return for landlords and property investors will continue to outperform savings rates offered by banks and building societies with yields offering up to 9pc available on well-informed purchases of the right rental properties in the right area.