Richard Donnell is director of research for Hometrack, and Richard reported in the Sunday Times on 10th August 2008, that the cost for first time buyers when considering buying their first property has increased by a whopping 21%. Take note that this would be before saving a deposit for their home.
Richard Donnell commented “Would-be first time buyers are being pushed into the rental market, despite rents rising by an average 9% over the past year.”
Perhaps even more interesting for Landlords and Letting Agents are Hometracks findings that it is on average £280 per month cheaper to rent a property from a landlord or letting agent than to buy a property from an estate agent or private seller via mortgage arrangements.
“Only when these dynamics change, through lower mortgage rates or changes in availability of credit, will sales transactions levels likely to improve.” said Richard.
Estate Agents must now consider if they can continue to survive comfortably in the current financial environment without having a well organised and well supported lettings department as part of their overall revenue stream. As you can read from previous Blog entries and as reported in the UK national media over the last few days the financial situatiuon in the UK is being flagged as going from credit crunch to full blown recession.
Letting agents, need to keep an eye on interest rates and the availability of credit to consumers. It seems unlikely that even with measures by the UK Government (see previous blog entry) to inject some impetus into the housing market that their measures will have any effective impact on the housing market overall.
Until the current situation in the UK Buy to Let market changes and the overall financial climate changes, renting a property from a landlord or letting agent is a market likely to flourish or continue at the current levels.
“The fact is, low housing turnover is here to stay for the foreseeable future” reports Richard.
Estate Agents looking to create a Lettings department or convert to Lettings should contact LetSafe (UK) Ltd today to ensure they have the best products and support available for their business.
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