Increase in Tenants of 24%
Research by the Association of Residential Letting Agents has discovered that 41% of letting agents had more potential tenants on their books than properties during the last quarter of 2009 – an increase of 24%.
Compelled into property rental due to a shortage of properties for sale and unaffordable mortgages, more than 50% of landlords felt that most new tenants had ‘reluctantly’ entered on the rental market after failing to get on the property ladder.
Continuing in this study the Association of Residential Letting Agents also found that the average length a property is left empty has dropped from 4 weeks to 3.9 weeks, following the influx of first time buyers into the sector.
Speaking on the issue, Melvin William of the National Association for Estate agents feels the main problems for first time buyers has 1) been being unable to afford the 20%-30% deposits needed to invest in property and 2) the lack lending available because of the stricter criteria in today’s market
Reports suggest lenders are now taking the attitude they should have taken 2 years ago where they are implementing stricter criterion onto their mortgage deals. However, this move has come too late and is now impacting on the property market in a different way by preventing first time buyers from investing and ultimately revitalising the market.
Similarly during 2008, builders were simply not building, which has created a shift in the supply/demand balance that has ultimately triggered the recent property price boom…
Of the new tenants to enter onto the rental market, the Arla believe they consist mostly of homeowners who were forced to sell their homes either due to financial constraints or a new job.
This is great news for Rent To Own (Lease Option ) strategy. Many of these tenants will be desperate to own their own home rather than renting, and lease options offers them the perfect vehicle to get onto the property ladder WITHOUT a mortgage or having to raise a huge deposit.
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