Monthly Archive for July, 2009

Renting gathers pace

It appears that the UK may be adopting more of a continental view of renting as people turn to it in ever increasing numbers.

In an uncertain property market many more people seem to be of the view that renting is the way forward, certainly for the time being. No longer is renting the preserve of students and those people who simply can’t afford to buy, people right across the working spectrum are now renting.

In a world where working pressures often result in an increasingly transient life as workers often find they have to relocate, flexibility in living arrangements can all too often be the difference between securing a job and not. Where property sales have slowed to a level that many people now feel trapped by their largest asset, renting is affording a level of freedom that property ownership simply can’t provide. And with as many as 1 in 10 UK home owners now finding themselves the victims of negative equity, the very British view that renting is nothing more than ‘throwing money away’ seems to be eroding fast.

It has always been the way in most European countries that many more people rent than buy. Take Germany for example where home ownership is less than 30% compared to the UK at over 70%. So are we moving toward a situation where higher numbers of people rent than buy? Perhaps, but then who knows what will happen when house prices begin to increase once again. In the land where an Englishman’s home is his castle, home ownership is engraved into our culture, and it may take more than a recession to change our way of thinking.

Are achievable rents on the increase at last?

After nearly 2 years of static or falling rents it appears that ‘green shoots’ of recovery are starting to appear in the rental market. 

Over the last 18 months we have seen a new phenomenon, that of ‘accidental landlords’.  Many people needing to move home but unable to sell their existing property have simply opted to rent it out until market conditions pick up.  This has significantly increased supply in the rental sector and resulted in struggling rental values as landlords have undercut each other in an attempt to attract a tenant.

However, with recent improvements in the sales sector it appears that this situation may be starting to rectify itself.

New figures from property website findaproperty.com show a rise in rental values for the first time in nearly 2 years.  Over recent weeks, a number of market commentators have been predicting a sustained rise in rental values and the figures from findaproperty.com reinforce this view.

With the growing belief that we have now weathered the worst of the storm the outlook for the rental sector is looking brighter than it has for quite a long while.  As property sales strengthen and rental competition reduces, landlords should once again be in a position where they can not only increase the monthly rental but more importantly achieve the asking figure.