The number of new applicants seeking to rent property rose by a staggering pace in March as many would-be homebuyers continued to struggle to gain a foot on the housing ladder, according to fresh data compiled by Sequence.
The first ever Sequence lettings index, which covers 11 brands including Barnard Marcus, Fox & sons and William H Brown, shows that the number of new applicants registering with the company in order to rent a home in March increased by 21 per cent compared to the previous month, while the volume of properties to rent only increased by just five per cent during the same period.
The figures also reveal that the volume of agreed new tenancies increased by 13 per cent month-on-month in March, while on a year-on-year basis, they were up by 19 per cent. Unsurprisingly, rental activity is being led by London, where rental applicants undertake an average of 11.3 viewings per let property, 33 per cent more than the country as a whole, which averaged 8.5.
Stephen Nation, Head of Lettings at Sequence, owners of Barnard Marcus, William H Brown and Fox & Sons and other leading brands, commented, “We have seen a strong seasonal uplift in demand for rented accommodation with over 12% growth in the number of new tenant applicants, viewings and agreed tenancies. However, we would expect a rise at this time of year so it is too soon to judge whether this strong demand will result in any significant rent rises in the coming months. So far this year we have seen rents remaining remarkably stable.
“Monthly Rents of £1,375 in London remain almost double the national average of £704. Londoners seeking rented accommodation are currently viewing an average of 11.3 properties before securing an agreed tenancy, compared with an average 8.5 viewings for the nation as a whole.”
The recent increase in rental demand – and values – has sparked a buying frenzy among buy-to-let investors, with many actively looking to add their property portfolios, reflected by a greater level of remortgaging activity in the first quarter of 2013.
The latest research from Mortgages for Business, the specialist buy to let broker, shows that remortgaging rose significantly from 43 per cent in the last quarter of 2012 to 69 per cent of all residential buy-to-let transactions in Q1 – the highest on record for a single quarter since the start of the broker’s Complex Buy to Let Index in Q1 2011.
“Gross yields are tantalisingly strong at the moment, and that has sparked a real splurge of refinancing as landlords try to unlock enough capital to expand their portfolios and make hay while yields are high,” said David Whittaker (right), Managing Director of Mortgages for Business. The buoyant buy-to-let market has also led to a rise in the volume of investors turning to alternative finance in order to acquire investment properties.
According to a poll of financial intermediaries, buy-to-let investments are now the most popular use for alternative lending. In the recent survey of 350 mortgage brokers carried out by peer-to-peer bridging lender West One Loans, a record 36% of intermediaries listed buy-to-let as the most popular use for bridging loans. This has increased dramatically from just 23% in the West One Broker Sentiment Survey in August 2012.
Duncan Kreeger, Director at peer-to-peer bridging lender West One Loans, said, “A generation of renters are demanding somewhere to live – and a growing army of landlords need loans to make the required investments.”
Article courtesy of PropertyDrum (JungleDrum)