‘Rule of thumb’ is that the rent should not exceed 30% of your monthly salary. Yet in some of the more expensive London boroughs, tenants would have to pay over 80% of their monthly income just on rent.
The Renters Reform Bill is not going to change affordability. It is all about supply versus demand. With tenants making ‘silly’ offers above the rental guide price, of course landlords and estate agents are going to look to push up rents.
11% of homes on the UK sales market are the sale of buy to lets according to Zoopla. An increasing number of landlords are quitting the UK rental market. Factors such as rising interest rates, inability to offset mortgages, ever changing restrictive legislation and general increasing costs, have made letting a property far less appealing.
What many tenant don’t realise is that this means a reduction in rental stock. More applicants chasing each property which pushes prices up. Both tenants and landlords are worse off.
The sale of buy to lets does not make them any cheaper
- Just because landlords are deciding to sell, it does not mean they will accept lower offers on their rental properties. However, with increasing mortgage rates many landlords are struggling to break even on buy to let properties.
When landlords struggle to break even, like a supermarket, price increases are passed on to tenants/ consumers
Unless a sale is ‘distressed’, landlords will ‘hold out’ for the best price to maximise their investment return. This contradicts Zoopla’s latest market snapshot, which says that on average these ex-rented properties are 25% cheaper in asking price than owned homes (typically £190,000 vs £250,000)
Unfortunately the increase in the sales of buy to let properties coincides with mortgages being pulled from the market, resulting in less mortgage products with higher rates
There is ‘no winner’
- Tenants are facing rising costs on all fronts
- Landlords are facing increasing mortgage rates and additional fees
House of Mum & Dad
- It is hardly surprising with what is going on that younger generation are staying home longer to save money. Unless you can share a rental property to keep down the monthly costs. That is why sites such as Spare Room are so popular with younger generations.
###Summary
On the continent, it is the ‘norm’ to rent. Fewer people ‘aspire’ to own a property. With property becoming ‘unaffordable’ for many to buy, the only other alternative is to rent, which has become equally unaffordable. People are renting rooms, renting with friends to split the costs, staying at home with parents or renting a property and ‘on the side’ subletting.
There is no ‘rhyme or reason’ to the current turbulent mortgage markets. It is all so closely linked to the UK and world economies which can change the whole time.
A property tip is to keep things simple. If you find a property for sale which you like, then don’t ‘dither’. Get your mortgage offer in place, do your costings and if it all makes sense, then don’t over-complicate it.
Communicate with the seller. Don’t go quiet. Sellers ‘hate’ not knowing what is going on. Don’t try and ‘gazunder’ last minute by cutting the price on a ‘take it or leave it’ basis. A slippery slope and many a sale have fallen through off the back of it.
The same for renting. Keep it simple. Landlords like tenants who are decisive and get on with it. If the ‘relationship’ between the landlord and tenant is poor at the beginning, it will only get worse during the tenancy.
At Pets Lets](https://www.petslets.com/), we are encouraging landlords to consider pets. Even a small dog or a house cat. You can mix & match properties on our portal, everything from long lets, short lets or holiday lets. As long as they are pet friendly. The first month is free. Agents & landlords listing with us are getting regular leads. Why not give it a go.
This article was written by Russell Hunt, Founder of Pets Lets, the UK’s pet-friendly property portal where landlords will consider pets. We work with clients from around the world looking to relocate with their pets to the UK. A hub of information & where you can create your own pet cv. Passionate about pets & property.