Renting Your House, Rental Market, Yields, Legal Process, Letting, Building
Renting Your Property : Rental Market Information
Property Yield Article
5 May 2012
Renting Your House
In Chicago currently the demand is strong for value-priced property and the rental market is “crazy right now”.
However in the UK there’s a shortage of first-time buyers in the housing market.
First-time buyers are stuggling currently. Apart from a recent rush by some to beat a stamp duty holiday, first-time buyers have largely been priced out of the market.
To get decent mortgages, they need big deposits that are very difficult to save for with incomes under pressure. The government is trying to help with its New Buy scheme. This would allow first-time buyers to buy houses with 95% mortgages. However, many mortgage providers are setting rates for these schemes around 6% which is understandably putting many people off.
So if first-time buyers are no longer feeding the rest of the property market, then who is? Look no further than the private rental market.
As with all markets, house prices are ultimately set by supply and demand. The 1990s UK house price crash saw high interest rates which led to a string of repossessions.
This flooded the market with a supply of houses, pushing prices down.
The private rental market plays a part in both the demand and supply of houses because frustrated would-be first-time buyers have been forced to rent, pushing monthly rental bills higher.
More and more people are turning to property in search of higher investment returns than cash in the bank. This has led to a resurrection of the buy to let market.
There has also been a surge in reluctant landlords who either cannot or will not sell their homes and are choosing to rent them instead – keeping them off the market. But despite last year’s rising rents and demand for housing, the rental market is showing signs of strain.