New EICR to cover any changes made by outgoing tenant?10:00 AM, 4th May 2021
About 2 weeks ago 96
Letting agents all over the UK are reporting a rush by tenants to rent buy to let homes as the mortgage squeeze continues to stop people who want to buy homes from jumping on to the property ladder.
The sadness behind the figures is that although thousands of would-be homeowners would snap at the chance of a mortgage, few can contemplate owning a home of their own in the near future.
The average deposit of £35,000 needed to buy a home is a life-changing sum of money that few young couples can aspire to save, especially if they are bringing up a family.
Although the Association of Residential Letting Agents (ARLA) reports rent returns are rising and more reluctant landlords are returning to the market because they cannot sell, banks and building societies are resolutely refusing to lend to anyone with less than a charmed credit record.
Some mortgage brokers are reporting lenders are turning down mortgage applications because an applicant with an otherwise unblemished credit record made a late mobile phone bill payment sometime in the past two years.
The fact is that banks and building societies opened their doors to risk and are now living with the consequences in terms of fraudulent loans, arrears and repossessed property that will not sell – unless they give a loan to the buyer, of course.
Meanwhile, the supply of properties to rent is drying up despite reluctant landlords cashing in on the market.
Put these strands together and the picture is buy to let is set to play a big role in the housing market for some years to come.
ARLA members – about 6,500 estate agents and letting agents – report that fewer landlords sold property in the last quarter, with figures down from 25% to 17% but added their ranks are swelling because homeowners who can’t sell are also looking to let their properties.
Perhaps a new housing market acronym should join the ranks of buy to let, let to buy and right to buy – this is let and let live as homebuyers rent a house to tenants and move in to a rented home themselves as they cannot arrange a new mortgage while they pay an existing one.
ARLA also reports rents and return on investment are up for both houses and flats nationwide, but the average 5% rental return on investment is considered a readjustment of losses in previous quarters rather than an upward trend.
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