The latest Royal Institute of Chartered Surveyors (RICS) survey has shown that demand for private lettings decreased in October, with Help to Buy – the latest government scheme to boost mortgage lending – a likely candidate for the cause.
RICS reported that 57% of the members surveyed reported increasing house prices – the highest proportion in 11 years. However, only 11% reported increasing demand for private lettings, which marks a 10-year low in tenant interest.
The Help to Buy mortgage guarantee scheme underwrites up to 15% of the cost of residential mortgages at up to 95% LTV, improving access to low-deposit mortgages for thousands of aspiring homeowners. RICS reports that the surge in demand that Help to Buy has created has resulted in the drop in demand within the rental market.
The link is implied rather than evidenced, and the lull in tenant demand could merely be seasonal. However, it seems likely that the dip is due at least in part to a higher volume of would-be tenants, aided by Help to Buy, turning away from private lettings in order to achieve the dream of homeownership.
The HomeLet Rental Index for October – the month that Help to Buy began – reported a 4.6% drop in average UK rents, further corroborating RICS’s claims. However, the average UK rent was still 2.7% higher than in October 2012, which is in fact above the rate of inflation according to both the Consumer and Retail Price Indices.
Avoiding the voids during the winter months
If you are worried that you might struggle to fill your property during the winter months, consider that energy efficiency is of particular importance at this time of year. As always, solid marketing is also very important.
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