Rental Demand Continues to Outstrip Supply

Renting is back in the spotlight this week with the news that more and more homes are being put on the private rental market by owners who simply can’t sell their properties. However, it seems that despite this increase in available homes, demand in the rental sector is still outstripping supply by some considerable margin.

The findings have come from the Association of Residential Letting Agents (Arla) who have noted a significant increase in rental properties that have come on to the market as a result of this scenario.

However, in many cases, the homes remain on the market and this could prove a problem for anyone renting and looking for a long term arrangement.

“Renting is often seen as a low-hassle, lower risk option when compared to purchasing a home, yet many people find the prospect of renting a home daunting, whatever their age or experience,” said Ian Potter, Operations Manager at Arla.

“First time tenants – young or old – should remember to keep the process as focussed and simple as possible. Keeping to some simple guidelines can help tenants navigate the process from property hunting to signing a tenancy agreement.”

The organisation has gone on to provide a series of tips for anyone renting for the very first time and these can be found in full at the website – www.arla.co.uk.

Included in the advice is a tip to research your postcode, which has a great bearing on the price you can expect to pay. Sometimes, even moving a mile away from a certain location will have a favourable effect on your monthly charge so remember to ask a letting agent for advice.

Arla also advise that the lettings industry is unregulated and at present, agents do not have to subscribe to an Ombudsman scheme. However, looking for an agent that is Arla affiliated will help to give you peace of mind.

You should also make sure that your deposit is safeguarded. This is a significant outlay for tenants and by securing it in a scheme such as TDS (the Tenancy Deposit Scheme) you can help to safeguard your money.

Arla also advises to get a proper inventory drawn up and agreed when you move in. This will identify any damage to the home – and its contents if you are renting furnished and will prevent any problems when the time comes to move out again.

Full details of this advice can be found on the Arla website and if you are renting for the first time, it makes sense to follow them and be sure of what you are entering into.

Record Rental Payments Take Up Half of Tenants’ Income

If you’re thinking about renting a property be prepared to surrender almost half of your take home pay or more.  Rents hit record levels in September and look set to rise even more as landlords hike up their rates.

Research has revealed that the average monthly rent rate rose by 1.6% in September alone taking the typical payment up to £890 a month.  This is making rents unaffordable to many across the country.

Rental asking prices have increased each month in 2011 with a total increase of 4.6% in the last 12 months.  This has added a whopping £468 onto the average annual rental bill.

Those living in London appear to be hit the worst.  Despite earnings being 41% more here than on average, the rents charged in London cancel out any benefits of a higher salary.  Average rents in London account for 76.3% of average earnings each month.  On average, landlords with rental property in London charge £2,075 a month whilst the typical London family brings in £2,721 in net monthly income.

By comparison, the best rental properties offering the best value are in Yorkshire.  Here average rents are only 35.2% of incomes.  With rental prices increasing at such an alarming rate it will be harder for UK families to afford to live in the areas in which they work or have family and friends.  It’s a catch 22 situation as many people choose to rent so that they can save for a deposit on their first property, but with little in the way of disposable income left for savings this is going to be very hard.

As a result of rental rises, many young professionals are starting to opt for flat shares in an attempt to save money on rent and put into a first home deposit.  Of course, it all depends on where you want to live or rather where you need to live.  If you can relocate to cheaper areas without any detriment to your working or personal life then this may be a good option to consider.