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'Unaffordable deposits' leading to rise in tenant demand
01st June 2012
The high deposits being demanded by lenders for owner occupier mortgages is the main reason behind the current surge in demand for rented accommodation, claims Sue Hopson, brand standards director at lettings agent Martin & Co.
Recent research by the Association of Residential Letting Agents (ARLA) found that over half (55 per cent) of its members have more tenants on their books than available properties to rent.
This is helping to push up rents and generate higher yields for landlords, as more and more people turn to renting rather than attempting to buy a home of their own.
"I think it is down to people being unable to afford the deposits," said Ms Hopson.
"It is really tricky to be able to get a foot on the housing ladder now. With the peaks and troughs that we've seen in house prices, some people are a little bit cautious about it."
One side effect of this trend could be greater focus on the rights of tenants and the development of more legislation within the private rented market to protect them.
"[The market] is heavily legislated in favour of the tenant," said Ms Hopson. "There is a huge amount of legislation added every year to lettings under the Housing Act.
"We've had tenancy deposit protection which has been in place in England and Wales for the last five years, we've just had some legislation updated again as of April 6th this year to protect tenants with regards to their deposits."
Another one of the responsibilities landlords have towards their tenants is to carry out necessary repairs to the property in a prompt fashion.
For those landlords without a great deal of spare time or who live far away from the rental property, landlord emergency cover could be a good way to ensure such repairs are carried out quickly and professionally.
Posted by Megan Statham