Lettings Supply and Demand
The squeeze on credit that has subdued the sales market has had significant implications for the lettings market. With many buyers unable to clear deposit hurdles to take their first step on the housing ladder or trade up, demand for rental property has continued to increase. In addition, with the restrictions on available credit limiting both existing investor landlords from expanding their portfolios and the number of new landlords able to invest, rental supply hasn't been able to keep pace with demand. In the last 12 months alone, search activitiy for rental property on Rightmove rose by 40% while available stock to rent fell by 3%.
The Cost of Renting
The failure of rental supply to keep pace with tenant demand, fuelled by tenants who are unable or unwilling to buy, has seen upwards pressure on rents. Whilst this has presented investors and landlords with an opportunity for attractive rental returns, recent research from Righove raises some interesting questions about h ow high the affordability ceiling is and how close we might be to it. A recent Rightmove survey of nearly 7,000 existing tenants revelaed that, on average, rent accounts for 38% of tenants' net monthly income and around one in three tenants spends more than 50% of take-home pay on rent.
Fron recently published Rightmove statistics:
36% of people think that house prices will be higher one year from now
1,227,000 new listings were added to Righmove in the last 12 months - down 4% on the previous 12 months
42% of first time buyers say that their parents (or other family member) plan to help them with their deposit
£18k - average deposit in 2012. 31% have a deposit of more than £25k
42% of investors over the next 12 months who will be buying their first investment property
56% of tenants are 'trapped renters' who would like to buy, but say the cannot afford to
56% of investors plan to buy a property more than 10 miles from where they currently live
135% increase in demand as measured by search activity, between April 2009 and April 2012.
How Can Martin & Co Help You?
With the experience of over 180 offices nationwide, Martin & Co Lettings Agents, based in Yeovil and covering Sherborne and the whole of South Somerset and West Dorset, are able to offer advice on the best way to invest your money into property for the lettings market. Having assisted buy to let investor Landlords over the past 5 months to purchase both new build properties in the Wyndham Park estate in Yeovil and older property in and around the Yeovil and Sherborne area, it is clear that the demand for high quality rental property in this area remains high.
Give us a call today if you are thinking of investing in property in South Somerset and West Dorset.