An interesting article in the Observer this week, discusses the upward trend in tenant demand for rented property. To summarise these comprise the following:
Immigration. This is where the biggest demand is – the government Actuaries Department estimates the average annual net immigration in coming years will be 145,000 a year, the Observer suggest the figure may be considerably higher. As most immigrants will be unable to buy their own property and are ineligible for social housing, their only option is renting in the private sector. Apparently demand from immigrants could boost the private rented sector by 55,000 homes every year.
A fall in the number of first time buyers. It seems the average age of the first time buyer is now 34 – before this most young professionals prefer to have the flexibility of rented property, plus many of them are paying off student loans and cannot afford to buy anyway. Also people are choosing to marry and start families later.
Overall this has resulted in a huge increase in the number of households. A large part of this is the demand from immigrants, but there is also more demand than formerly from the indigenous population.
The government is not willing to fund the building of more social housing, or help finance owner occupiers by re-introducing MIRAS. So there is a real need for private landlords to meet the growing demand from tenants.
It is not surprising therefore that a recent report in The Times states that the buy to let industry is now one of the UK’s ten fastest-growing industries, alongside computer services and management consultancy, and produced a £45 billion increase in income between 1992 and 2004, a rise of 120 per cent.
All good news for landlords.
Thanks for highlighting this. I’ve picked it up on Nearly Legal, but only to largely echo your points. 13% is a dreadful referral rate.