Rental Markets Boom in UK

Online, June 12, 2012 (Newswire.com) - The report researched and published by Savills shows that the increase in the private rental sector has been dramatic over the past five years. There are over 50 per cent of households renting a home in the UK and there is a 42 per cent increase in the value of housing in the private rental sector.

The report also shows that whereas previously, the main renters were younger people and families, there is now an increase in older renters because of difficulty in obtaining a mortgage or because it is cheaper to rent than buy in the current property market. It is estimated that over a quarter of renters are aged forty and over.

The numbers of first-time buyers have also declined overall during the past five years because of the inability to obtain mortgages and the high deposits that are required. Mortgage lenders are also restricting access to mortgage finance. Mortgages of loan to value lending of 90 per cent have fallen in real terms by 95 per cent during the past five years.

The report also showed that there are wide regional differences when it comes to average rent values across the UK. In and around the London showed the highest rental values and the indicator of rental affordability for a two bedroom property averages 53 per cent of income. Other rental hotspots in the UK are Oxford with the average rent on a two bedroom property of 57 per cent of the average income, and also Brighton and Hove which reaches 47 per cent of income on a two bedroom property. Milton Keynes showed rent affordability of 32 per cent of income for a two bedroom home.

London also has the lowest property ownership figures because of the inflated property prices and career starters who are renting in and around the city. It is also likely that good quality, affordable houses to rent would be difficult to find with current shortages in accommodation. Certain London areas were more expensive than others for two bedroom properties, such as Kensington and Chelsea being five times more expensive than Bexley. Other areas such as new homes in Birmingham showed affordability compared to income ratio.

Notes to Editors:
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