Mortgage difficulties raise rental demand

28 May 2010

Written by Jeni Browne

Mortgages are still difficult to obtain for first-time buyers, making it difficult for them to step onto the property ladder and forcing them to remain in rented property, an expert has said.

With home loans scarce, the job market still struggling and many "accidental" landlords selling their properties as house prices rise, Tom Entwhistle, director of LandlordZONE.co.uk, is not surprised that landlords are seeing strong demand.

Other worries to would-be first-time buyers include uncertainty in the economy as the value of the euro drops on financial markets and the effects of new policies to be implemented by the coalition government on the housing market are not yet known.

Recent research by the Royal Institute of Chartered Surveyors (Rics) revealed that demand was outpacing supply in the private rented sector, pushing rents higher - a sign of recovery for the industry.

In April, the net balance of chartered surveyors saying they saw a rise rather than a fall in rents was 30 per cent, compared with zero recorded in January and up from the lowest ever result of minus 58 per cent at the same point last year.

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