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Rental demand up 41% in May

Tuesday, 24 June 2008 12:00 AM

Demand for rented property in the UK market increased by 41 per cent in May, when compared to the same month of 2007, according to new research.

Findings from letting agent Your Move show lease commencements were also up 41 per cent in May 2008 from May 2007.

Furthermore, tenant demand increased month on month in May, with the number of leases commencing during the month rising 14 per cent when compared to April.

It is argued the turmoil in the wider market is forcing would-be buyers to adopt a 'wait-and-see' attitude to price falls.

"Mortgage finance is hard to come by these days - the rental market is definitely picking up the slack," said managing director of Your Move estate agents, David Newnes.

"And we've seen a considerable number of would-be buyers put house purchase on hold because of the squeeze on their finances. They're turning to the rented sector while money is tight," he added.

May's increase in tenant demand is part of a wider trend, finds Your Move.

In April 2008 the number of leases commencing was 56 per cent higher than the year before.

The number of leases commencing in 2008 in total is up 34 per cent on the same period in 2007. Month on month, there has also been a steady increase in tenant demand from March this year.

"There has been a significant rise in the number of people looking to in the past few months," continued Mr Newnes.

"Banks and building societies are tightening their loan criteria and raising their fixed rates week in, week out - people who would have fallen into the first time buyer bracket a year ago are now renting."

Research from Nationwide finds average house prices in the wider market have fallen by 4.4 per cent over the year to Mat.

"Buy-to-let will grow this year. Opportunities to invest are ripe for professional landlords able to secure financing," said Mr Newnes in conclusion.

"With rising tenant demand comes rising rents - buy-to-let yields will consequently improve.

"House prices are under pressure at the moment, and there's scope for buy-to-let investors with collateral to get good deals to expand their portfolios."

Chris O'Toole

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