The Changing Face of the Rental Market
Research conducted by Callcredit Information Group has identified that those successful in obtaining a mortgage has fallen by 15% in the past eight months, causing a knock on effect in the rental market which has seen an increase of 10% as potential homebuyers switch to renting as they continue to struggle to get onto the property ladder.
High property prices, the end of stamp duty for first time buyers and the tightening in lending criteria by mainstream mortgage providers have all had an impact. This rise in demand for rental properties has also seen an increase in rental costs of between 2.9% and 4.3% across England and Wales over the past 12 months, with no sign of slowing down as we head into the latter part of the year.
High rental costs are leaving tenants with little disposable income, adding to the battle of trying to get onto the property ladder, for many keeping up with rent payments alone is proving to be difficult with the average tenant reported to be £760 in arrears in May of this year and as the financial strain becomes too much those choosing to move back in with their parents has increased by 23% compared to May 2011.
The knock on effect for some landlords is that they struggle to meet mortgage repayments, this coupled with the added pressure of some lenders increasing mortgage rates, means that they too are running the risk of running into financial difficulties when rents are not paid on time.
Consequently finding reliable tenants is becoming increasingly important and more and more landlords are turning to the use of performing a credit check on potential tenants as unemployment continues to rise. Obtaining as much information and providing greater insight is vital for both parties which is why we created TenantID. Now part of Callcredit Information Group TenantID's database is run for members of a nationwide network of letting agents, landlords and local authorities.
Each member uploads information about their tenants and that information subsequently becomes available to other members on request. If a tenant has not paid rent, damaged a property, misused the property or simply vanished owing money to the landlord, that information is stored using a simple tick system which collects factual information. The database has been created to provide those in the lettings industry with vital information about the history of prospective tenants and designed to protect the nation's landlords, local authorities and letting agents.
Lorna Stevens, Director of Tenant ID said "It is clear that both landlords and tenants are feeling the financial strain, as the rental market continues to boom and rental prices increase. Therefore it is important that landlords have as much insight as possible on each prospective tenant to ensure that they have the peace of mind that they will have a trouble free tenant. As the cost of living continues to increase, the number of people turning to rent rather than buy increases too, the unstable economy and the potential increase in unemployment all loom, pressure continues to mount on the landlord to find the right tenants for their property"