2014 overall has been a good year for the lettings market, Glynis Frew Hunters Director gives her views on how the market has been:
"There have been many predictions and startling headlines this year about the Lettings Market. For example there will be an additional 1.2 million households in England & Wales in the private rented sector by 2019 meaning that 24 per cent of all homes will be privately rented (according to Savilles) and over half of UK homes will be rented by 2032 for the first time in sixty years if current housing trends go unchecked (according to a new report by the Intermediary Mortgage Lenders). Whatever the predictions and whatever the trends; renting has become and will remain a residence form of choice for many.
Recent research carried out on behalf of the Aviva insurance giant (by ICM) in September, interviewed 2,545 adults across the UK; of these 1,301 lived in homes which they owned with a mortgage, while 1,244 lived in rented accommodation. Homeowners had moved on average 1.8 times over the last 10 years, compared to private renters who had moved 3.0 times, demonstrating that people often choose to rent because of the freedom it represents, and additionally that lettings is an important and growing sector within the British property market.
The sales market has been strong and lettings have seen demand for properties high but supply low and so the annual growth in average rental values for the three months to October 2014 (7.8%) was higher than 2013 (4.8%), 2012 (2.9%) and 2011 (5.3%) and yet in the three months to October 2014, average tenant incomes were 6.3% higher than in 2013. Average rental values for new tenancies in London (&1,411pcm) were &123 more expensive per month when compared to average rental values in October 2013 (&1,288pcm). To provide the balance to that view the Joseph Rowntree Foundation is predicting increased risk in the private rented sector. In its latest research report, released earlier last month, it concluded that the private rented sector is projected to house 20% of the population in England by 2040 whilst social renting will simultaneously decline to just 10%. However, this increasing demand is expected to put upward pressure on rents which are predicted to rise by 90% between 2008 and 2040, increasing at twice the pace of tenants’ incomes. This would mean half of all private sector tenants ending up in financial difficulties by 2040, suggesting that increasing numbers will fall into rent arrears in the future. This combined with increasing and extensive legislative pressure on the industry makes in more important than ever to ensure compliance and the need to employ a reputable agent.
The continued rise though represents the market – supply versus demand. The outlook for the lettings market is good, providing landlords supply good standard properties to live in there is no shortage of prospective tenants waiting to move in. At Hunters we believe this trend will continue in 2015".
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