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Lettings market will remain buoyant
Published April 28th, 2014
There are currently 4.14 million people living in the private rented sector and this is expected to reach 5.7 million within four years. Forecasts indicate that 600,000 extra rental properties are needed by 2016 if public demand is to be met.
There are many potential factors combining to create the increase in demand in the rental market. The first of these is the upwards rise in house prices in recent years, combined with the stricter rules surrounding the mortgage application process. These factors have forced many young singles, couples and families to become long term tenants as saving a house deposit seems like an unsurmountable hurdle.
In addition, the corporate market has become much more active with many young professionals on good budgets looking for secure, high end homes but with an easy escape route in the event of relocation. Very often, these tenants are benefiting from their companies paying for their relocation and many landlords like the security which they are able to offer.
Another growing demographic is the family market; as we get closer to the summer holidays we should see this continue to climb further. Being within catchment boundaries for schools with Outstanding Ofsted ratings are the primary motivator for many and often families move to ensure their offspring can secure a highly coveted place.
These statistics indicate that the rental market shows no sign of slowing and investment figures from the last 20 years also paint a very attractive picture. According to recent research by the Wriglesworth Consultancy, every £1,000 invested in an average buy-to-let property bought in 1996 with a 75 per cent loan-to-value mortgage is now worth £13,048.