Renting to overtake home sales in 2017
A new study has found that for the first time since the 1930s, property lettings may overtake property sales – a trend which could affect the buy-to-let market.
In recent months the buy-to-let sector in the UK has been hit time-and-time again by changes to tax and regulations. These changes have in many cases reduced returns on investment for some properties. However, new data from estate agents Countrywide suggests that the UK is about to experience record levels of new lets agreed.
Analysis by Countrywide of the number of homes advertised for sale and for rent online showed that over the past five years, rental activity was catching up with sales and was likely to exceed them in 2017.
Johnny Morris, Research Director at Countrywide, said: “As some would-be buyers and sellers sit on their hands, Brexit-induced uncertainty has continued to boost the rental market … September saw record activity, with increasing numbers of lets agreed and tenants choosing to renew their contracts.
“On current trends 2017 could be the first time since the 1930s that more homes are let than sold.”
The study also found that rents are rising faster in Northern cities, particularly Manchester, than those in the South, such as London, Oxford and Cambridge.
The average rent in the North of England now stands at £692 per month compared to £1,100 in the South – opening new markets for investors to explore.
This new report comes on the back of other research which shows that homeownership is at its lowest levels for more than three decades, as fewer homes come on the market at an attainable price.
Meanwhile, another report from online estate agent Rightmove, showed that sellers coming on to the market in October asked 0.9 per cent more for their properties than those putting their homes up for sale in September – hinting that current rental trends are likely to continue as house prices increase.