Mortgage famine fuels buy to let rent rises

Mortgage famine fuels buy to let rent rises

15:23 PM, 25th May 2012, About 12 years ago 1

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Rent rises are fuelled by a mortgage famine that is forcing home owners that cannot sell to become reluctant landlords who have to rent themselves to move on.

The latest lettings survey by the Royal Institution of Chartered Surveyors (RICS) shows rents have followed an increasing trend since 2009.

RICS reports that 13% more letting agents saw rent rises rather than decreases in April, and that increasing demand is leading to rents going up as the number of homes to let falls.

The survey also revealed the number of letting agents signing up tenants seeking homes was up 15%, and most wanted to rent houses not flats.

The number of new landlords wanting to rent homes was up 7% – and many were homeowners who could not sell but needed to move.

The report also notes that some landlords are asking too much for rent and that prices will fall – and that this is already happening in London.

RICS argues that the main pinch point leading to house sale problems is lenders failing to approve mortgage applications while demanding deposits that many working families find out of reach.

This policy has forced the average age of first time buyers up to 37 years old.

Gross yields for landlords were up across the country except for London – unsurprisingly as the result of rising rents and falling house prices.

Peter Bolton King, a director of RICS claimed: “The rental market is still fairly buoyant and this looks likely to continue, given the challenges facing the sales market. Indeed, mortgage finance may become even harder to access particularly for first-time buyers if the euro crisis continues to deepen.

“This points to tenant demand continuing to outpace supply. As a result, rents will remain on an upward trajectory, adding to the pressure on many households whose incomes are already being squeezed.”

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Devon Landlord

21:35 PM, 25th May 2012, About 12 years ago

I am feeling increasingly sorry for property owners who wish to move, often to find employment and who are only able to do so by becoming accidental landlords. These new landlords often have no idea of the pitfalls that lie in wait for them when the enter the minefield world of the landlord. The recent changes in the Deopsit Protection process is but one example of such a trap. The new legislation extends the time in which deposits can be protected to 30 days, but that is now a defined cut off point. What these new entrpreneurs perhaps do not know, along with very many older ones too is that you must provide your tenant, within the set time, with a copy of the prescribed information as well as the deposit terms and conditions (All 10 pages of it!). Failure to do this could and perhaps will render the landlord liable to a fine equal to the deposit.

It is about time that the DPS looked at their website, which seems to me not to have changed for years, and make it more user friendly. Perhaps they could mention the prescribed information and how to get to it, as well as the importance of so doing. I wonder if the Courts will accept a plea from a landlord that the DPS website is so useless that they could not find the information easily even when they were aware of the prescribed requirement to get it to the tenant within a set timeframe!

I call upon all users of the system to get on to their MPs and get them to act on their behalf by lobbying the Minister to kick the DPS into action.

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