Assetz® News » HOME | RSS Feed FEED | LIST ALL ARTICLES | ASSETZ HOMEPAGE
Investment Property News from Assetz

Assetz® Property News Service

Private rental sector 'boosted by financial conditions'

9th November 2007 | back to article listings BACK    print this article PRINT

Although many recent studies point to a gradual slowing down within the country's housing market, it has been suggested that in fact there are a number of reasons why buy-to-let investors should be optimistic about the their future prospects.

According to Simon Gordon, head of communications for the National Landlords Association, the introduction of the 1988 Housing Act helped to revive a declining market by ensuring that owning a property and choosing to let it out was a worthwhile venture.

And since then, the private rented sector has gone from strength to strength in recent years, as property price inflation has reached dizzying levels and many would-be homeowners have been unable to get onto the housing ladder, increasing tenant demand.

However, as global financial volatility threatens to squeeze the UK's overall property market, Mr Gordon argued that in reality, there are a number of separate housing markets that "differ from area to area".

For example, the market in the north-east is distinctly different to the housing sector in London, he explained, suggesting that in the south-east in particular the private rented sector is being boosted by the number of people who are unable to get onto the housing ladder.

"The private rental sector soaks up a great number of young professionals," Mr Gordon commented.

"In London, young professionals arrive and they cannot go to the public sector, so they have to go to the private rental sector," he added.

Such a trend was confirmed recently by a report by Paragon which suggested that potential homebuyers are choosing to defer their property purchase decisions during the current financial climate and deciding to rent instead.

Nigel Terrington, the company's chief executive, said that lenders are currently "handpicking" the customers they believe will pose the least risk, with rejected applications reported to have increased by 60 per cent in the last six months.

Such trends may provide buy-to-let investors with significant new opportunities, while the private rented sector is providing a suitable solution to people not yet ready to make that first step onto the property ladder.

Mr Terrington said: "The growth of the buy-to-let market has given these people more options - before it was either live at home or buy a property, even if it meant you were financially stretched, and we saw the consequences of that in the early 90s with mass possessions."

The private rented sector now offers "good quality alternatives to house purchase", he added.

Assetz® is a UK and International Property Investment Specialist. Please visit our property sites shown below.

Assetz for Investors UK Assetz Hotels Assetz Homes Assetz International Assetz France Assetz Spain Assetz Cyprus Assetz Germany Assetz Portugal Assetz Ski Assetz Cape Verde Assetz USA Assetz Finance Assetz Fund Management

Accessing the news service

You can view all of the Assetz® UK, International and UK Property Investment Articles and News here.

We also provide an RSS Feed Feed of the news service, or you can view all articles. Click here to view more information on RSS readers and how they make reading online news more convenient.

eXTReMe Tracker