RLA News Service

Landlords of residential properties in the United Kingdom may stand to benefit from a trend which is seeing people renting for longer periods of time, before finally buying their own home. The Economist, one of Britain’s most prominent weekly magazines, suggests that many young Britons are continuing to rent and have put off plans to buy a home, due to the strains of high mortgages and declining home values. Housing prices are continuing to fall throughout much of the UK and home values have declined by approximately 9 percent since October 2007. Additionally, many homeowners find themselves weighed down by costly mortgages, only to discover that they may not be able to put their house on the market for the same price for which they purchased it.

Yet Britain’s housing market has been transformed by what continues to be a booming buy-to-let residential property sector. Although it may have been difficult to find quality private rentals a decade ago, the number of people who join the buy-to-let market as landlords has increased noticeably and this has led to more choice than ever before for people who choose to rent before buying their first home, in order to avoid the financial strain of massive mortgages. There are currently 2.5 million rental homes in Britain, owned privately by landlords, many of whom were able to purchase them through buy-to-let schemes.

While landlords may be concerned about the falling value of their residential property, this is being balanced out by rising rental prices and the fact that the number of Britons looking to rent remains strong. At such, a growing number of economists are discovering that the only glimmer of success in an otherwise dismal housing market appears to be coming from the private rental sector, where demand stands at impressive levels.

Tags: buy-to-let mortgage, private rental sector, rising rental prices

This entry was posted on Friday, August 1st, 2008 at 3:32 pm and is filed under Market News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.