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News: Buy To Let Market In Turmoil

Mon, 11 Aug 08

The buy to let property market is facing an uncertain future after latest research found that around one in ten tenants are unable to afford their rent.

Rental prices in the buy to let market have rocketed in recent years as landlords struggled to cope with rising mortgage costs and sought to take advantage of increasing demand.

However research by AXA found many tenants are struggling to meet their rental costs and prices may have to be reduced.

It found that 13% of renters had fallen into arrears in the last 12 months, over half of these (7%) have been in the last three months alone.

Around 50% of all those surveyed say they are increasingly concerned about being unable to afford their rent.

Mike Keating, managing director of Personal Lines Intermediary at AXA, said that in some areas landlords have already been forced to reduce prices.

He said: “Our research shows that over a third of people privately renting are doing so because they can't get a mortgage at the moment. On the surface of it, this looks like the rental market should be buoyant.

“But if you consider that many of those renting may be struggling to make ends meet it's certainly not all good news for buy-to-let owners.”

The survey was carried out during July and involved interviews with more than 1,000 tenants in the private residential property sector.

 

 

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