CULTURAL SHIFT IN RENTING PREDICTED FOR 2013.
An interesting press release relating to the rental market courtesy of Belvoir Lettings, Bury.
A cultural shift towards renting property rather than buying looks set to continue into 2013 and beyond, predicts nationwide lettings specialist, Belvoir.
Analysis of data from over 140 Belvoir UK offices confirms that there has been a change in consumer attitudes towards renting property in the UK and that this change is likely to be permanent.
The findings are contained in a new report, just published - ‘The Belvoir Rental Index’ – which has tracked the ups and downs of the UK rental market from 2008 to October 2012. “ We believe that the private rental sector is likely to remain a popular choice for 2013, with demand for rental property unlikely to slow,“ says Dorian Gonsalves, Belvoir’s Chief Executive Officer.
“In 2012 the UK economy went into a double dip recession and, despite hints at recovery, there is still a great deal of uncertainty around. From a rental perspective, the prospect of continued slow economic growth in 2013 is likely to ensure that renting versus buying property remains a real favourite for newly formed households in the year ahead.”
Since the start of the ‘credit crunch’ in 2008 few property rental levels have kept pace with inflation and over the past five years average UK rents across the board have actually fallen by nearly 2.4 per cent – despite perceptions to the contrary. Chris Roberts, co owner of the Belvoir Office in Bury, says :“This is good news for tenants because they can fix and control their monthly accommodation budget in these tough times and still achieve excellent value for money.
“The flexibility of rented accommodation means that tenants can, if necessary, re-locate more easily to take up employment opportunities elsewhere. They are also free to trade up or down to meet changing economic and family circumstances.”
The trend towards increased renting is good news for landlords too, since local markets for rented housing continue to expand. “I believe that the buy to let market continues to offer great opportunities, but anyone looking to invest in 2013 must, as always, have a clear strategy, since it is not a ‘get rich quick’ scheme,” he added. “They need to ensure they buy property at the right price, in the right location and identify the type of property which people will want to rent from them both now and into the future.” Looking back over 2012, there were several major influences on the rental market. Economic performance “How the economy performs affects the rental market in two ways,” adds CEO Dorian Gonsalves. “Key factors such as inflation, wages and unemployment impact on what tenants are able to afford. The country’s economic performance also has a major bearing on consumer confidence - and lower confidence means it is less likely that people will commit to long term purchase of property. This was evident in 2012. Inflation and wages “This is another key factor which affects rental income for both tenants and landlords.
From a tenant perspective, if wage growth is higher than inflation, they can afford to pay more. If it is lower, their disposable income is restricted so it is tougher for tenants to afford rent increases.
Unemployment “Despite the doom and gloom around the economy and debt, unemployment rates fell in 2012 and, according to the Office for National Statistics (ONS), are currently at 7.8%. “Forecasts for 2013 are mixed, with some suggesting that unemployment will continue to fall, while others predict a rise. The Centre for Economics and Business Research (CEBR) predicts that regional unemployment figures will vary, but are likely to rise across all regions between now and 2016, bar the South East, East and London.
“Any increase in unemployment in 2013 would be likely to increase the number of people that choose to rent, as buying a home won’t be the first thing on their mind.” Belvoir Bury’s Chris Roberts adds,“As renting becomes more and more popular – especially amongst people under the age of 30, who are increasingly moving away from property purchase – we are moving into ‘Generation Rent’ - with both tenants and property investors and landlords coming out as winners. “ But now, more than ever, it is important to seek sound, professional advice and I would advise any investors that are considering increasing their BTL portfolio in 2013 to seek free specialist financial, tax and professional advice and guidance from your local Belvoir team here in The Rock, Bury.”
For more information about Belvoir Lettings and the services they provide please click here.
