Is the tide turning in the rental sector?
New research carried out by The Association of Residential Letting Agents (ARLA) suggests an easing in the demand for market rentals and an increase in the number of tenants struggling to meet their monthly rent repayments. It is thought that this may be signalling a softening in the rental sector.
According to research, in the last quarter of 2011 just over half (55%) of ARLA members reported there to be more tenants than properties available. While this indicates that demand is still relatively high, the figure is down on the previous quarter, when 74 per cent of members reported that trend.
During the same period, 39.2% of members reported an increase in tenants struggling to pay their rent; this figure is up 2.5% from 36.7% in the previous quarter.
The president of ARLA, Tim Hyatt commented: "The apparent drop in demand for properties in the rental sector could be due to the traditionally quite pre-Christmas period. At the same time, it could indicate a reversal of the surge of new tenants who turned to the PRS when they could not afford to buy.
"With household income decreasing and job uncertainty prevailing, it could be that increasing rental arrears is a sign that the wider economic malaise is having a tangible impact on personal finance - some consumers may have reached the limit of their access to finance, while others may be cutting back as many commentators have predicted.
"We are reassured by the fact that the number of new tenancies is stable, but we will be watching the market closely in the coming months to determine how significant these latest figures will prove to be.
"In tough economic conditions both landlords and tenants can find themselves struggling to keep up with rent or mortgage payments. It is therefore more critical than ever to take references and conduct thorough research before signing a tenancy agreement. Seeking advice from a professional, licensed letting agent is the best way to ensure tenants and landlords' rights are protected."
It is thought that there could be a greater need for different forms of landlord insurance in order to protect landlords against such possible outcomes.
As standard Makeurmove comprehensively reference tenants under the free tenant find service. We advise collecting copies of utility bill and photographic ID as an identity check. Some of our landlords request Guarantors to act as insurance for them, some a larger deposit and some take rent guarantee insurance. Meeting the tenants at the viewing can be key to ensure the relationship works from the offset. This is also part of our service.
Marc, Personal Agent, Makeurmove