Property and Real Estate

Renting

There has been a noticeable change to the attitude of people when it comes to renting. It used to be thought of as dead money and mostly a short term option until you could get on the property ladder. But now it is seen as a real alternative to having a mortgage for 25 years, tenants are feeling this way because it is flexible and there are some very good value renting opportunities with some properties.

Due to the uncertain property market, in a lot of cases vendors are now choosing to rent out their homes rather then sell them. House prices are low so it may be a better option to rent your property out and wait for house prices to recover before attempting to sell.

This situation means that there is now a good supply of houses for rent on the market and they are of an increasingly high standard. Homes that have been maintained by owner-occupiers tend to be of a higher standard than houses that have been bought purely as buy to let. The rise in available rented accommodation has also seen a rise in demand due to the credit crunch which has been the cause of many repossessions. This has caused a change in the rentable market in itself, as the percentage demand for smaller accommodations compared to family sized accommodations is changing. It remains to be seen how this will all turnout when the market settles and stabilises, but that may be many months if not years away.

Reports have shown that rents have increased by only 0.6 percent during April-May-June of 2008, compared to 4.2 percent over the same period in 2007. This can be attributed to the extra supply of rented accommodation but it is thought that the market will stabilise enough by the beginning of 2009 for rents to start to increase again. Why do rents need to increase? If rents don’t increase then landlords who are now paying high buy to let mortgage interest rates will find that their own properties will be repossessed. This would end up with only the very wealthy cash rich individuals or organisations owning properties.