Attitude to renting property in the UK is changing as fewer people are able to buy and are forced into becoming reluctant tenants, research suggests.
In the latest fourth quarter survey from the Association of Residential Letting Agents, some 71% of landlords asked said they felt renting was more popular now than a year ago. In 2009 the figure was just 35%.
And, when asked about attitudes to renting and whether consumers would rather buy than rent, the majority of respondents, 67.2%, felt that people were being forced to rent, a slight drop on the previous quarter which was 71.6%, but still up on the same perios of 2009 which was 54.2%.
‘Our research suggests that, while more and more people seem to be renting post-recession, for many this is through need rather than choice, a trend that will likely continue as long as the demand for homes outstrips supply,’ said Ian Potter, operations manager of ARLA.
‘With the average age to buy a first home now reported to be 35, it is also possible that renting will become the norm for more people than ever before,’ he added.
He warns that both reluctant tenants and those who rent by choice, must conduct thorough research before making a move. ‘While there are many benefits to renting or letting a property, as there is no Government led regulation, things can and do go wrong. If you’re letting or renting a property through an agent, check that the agent is a member of an organisation such as ARLA, which ensures landlord and tenant money is protected by a client money protection scheme. ARLA agents are also required to be members of an ombudsman scheme which can offer redress if things to go wrong,’ he explained.
Meanwhile, a separate report shows that property rents in the UK have fallen for the first time in 11 months, dropping by 1.2% in December to an average £684 per month, according to the latest Buy to Let Index from LSL Property Services, which owns the UK’s largest lettings agent network, including national chains Your Move and Reeds Rains.
Christmas spending brought a surge in arrears, with 11.7% of all UK rent in arrears, rising from 9.7% in November. Total annual returns also declined as house prices continued a steady fall.
Despite the decrease, rents in December were 3.8% higher that a year ago. The average yield fell slightly to 4.9% in December, the first drop since January 2010, as rents declined at a faster pace than rental property values.
Rents fell fastest in Wales, down 2.6%, while the average rents in the south east and London decreased by 2.5% and 2.3% respectively. However, rents did drop in all regions of the UK. The west midlands and south west saw rents rise by 2.2% and 1.7%, while there were smaller increases in the east midlands and north east.
The slowdown in rents is down to landlords’ pricing strategies, according to David Newnes, estate agency managing director of LSL.‘Landlords offering properties during the holiday season often lower the asking rent to avoid a costly void period.If a landlord cuts the rental price by 5% to fill a property immediately, he will save £275 over the year rather than seeing their property vacant for the duration of the month. Nevertheless, with the supply of mortgage finance to both first time buyers and would be landlords still constrained, we are likely to see rents restart their upwards march before the spring,’ he said.
The Christmas period had a negative impact on tenant finances. 11.7% of all UK rent was unpaid or late by the end of December, rising from 9.7% in the previous month. Unpaid rent totalled £276 million across the UK in December, the highest total since December 2009.
‘The Christmas break has taken its toll on tenant finances. Many tenants have felt an additional financial pinch from Christmas spending, while others’ payments have been affected as a result of vacations over the holiday,’ added Newnes.
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