With house sales in the doldrums, large numbers of Brits are finding it impossible to shift their properties. As a result, according to the Royal Institute for Chartered Surveyors, record numbers are deciding to rent their places out instead – and with many potential buyers unable to get a decent mortgage rate, there are still plenty of tenants in the market…
In its most recent monthly survey, RICS painted a predictably depressing picture of the housing market, with surveyors reporting fewer transactions, falling prices and shrinking demand. But today’s figures suggest that the rental market isn’t suffering in the same way. In fact, RICS says that the number of rental properties has now hit record levels, as homeowners who are struggling to sell have decided to become landlords instead.
And thanks to the problems in the financial sector, there’s no shortage of demand. With some lenders (like Northern Rock) retreating from the new mortgage market altogether, and others unwilling to provide funds unless borrowers stump up hefty deposits and a high rate of interest, many potential buyers just can’t afford to get on the ladder. Equally, with some analysts predicting that prices will continue to fall for at least another 12 months, many of those who have managed to sell their properties are opting to rent while they wait for the market to bottom out.
The result – according to RICS, anyway – is that people are turning to rentals in record numbers; it says demand is now at its highest level since its records began in 1998, with 37% more surveyors reporting a rise in demand as opposed to a fall. As a result, rents are actually going up in some parts of the country (although this will presumably change if homeowners keep opting to rent instead of sell).
Unfortunately the rental picture is not quite so positive in the commercial real estate market. In fact, things are so bad at property group Brixton Estates (which reported a £237m loss today) that CEO Tim Wheeler was forced to fall back on Bob Dylan’s ‘All Along the Watchtower’ to explain the current state of the market: ‘Businessmen, they drink my wine, plowmen dig my earth/ None of them along the line know what any of it is worth.’
It’s clear that The Times They Are a-Changing in the property market. But for homeowners, perhaps Dylan’s Dear Landlord might be more appropriate: ‘Dear landlord/ Please heed these words that I speak/ I know you've suffered much/ But in this you are not so unique’...
In today's bulletin:
Tenants super for gloomy house sellers
US economist: we're going to see a whopper!
BAA secures its future - for now
Editor's blog: I Don't Know How He Does It, Part Three
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