Rental properties are becoming more affordable for Britons

The rental market in the UK is gaining momentum. More than 60% of landlords intend to expand their portfolios in the next six months. Banks are very positive about new loans and 45% of landlords intend to refinance in the next six months. The vast majority of homeowners stated that the most preferred type of loan is a loan with a five-year fixed rate. Today, interest rates on mortgages “Buy to let” – “buy to rent”, are at historically low levels and fixed rate loan will be the protection in the event of a rate hike by the Bank of England.

Meanwhile, the pace of growth in rents for residential property in England and Wales has slowed down and is lagging behind the current rate of inflation – only £5 increased the average rent for 12 months, from £736 to £741, which amounted to 0.5% per year. And the rate of inflation measured by the consumer price index reached 1.6%.

Rent in April 2014 was 12.9% higher than in January 2010, while inflation for the same period was 14.5%, which also shows that rental prices of residential properties do not reach the average inflation indicators.

Whatever the scheme, support the real estate industry is not conducted by the government, the rental market in the UK, in contrast to the market for sale in the UK, is directly tied to the growth of incomes. Here are the prices clearly show the consumer the average Brit and can’t grow stronger than grow the income of the average Briton. The market for the sale of real estate is crowded with foreign money – first of all, this is money the UK government, which is actively implementing different schemes of assistance, stimulating the construction industry of the island, and secondly, it is money of foreign and local investors who are attracted by good yield of residential property, happy to invest in it.

But this circumstance, there is another side of the coin, in conditions of extremely low mortgage interest rates, homeowners who invest in “buy to let”, happy to expand their portfolios, the rental market will get more proposals and thus plays into the hands of the end user – prices for rental property in a competitive environment, almost not growing.

Indeed, the financial situation of tenants has significantly improved over the year from 2013, according to statistics on debt – during the year the total debt of all tenants in England and Wales decreased from 8.4% to 7.4%.

A General improvement in the UK economy after the crisis of 2008 is slowly but surely reflected in the real estate market. Wage increases according to the improvement of the economy and it will certainly affect the improvement of living standards of the British.

® Helen Entree. 15.05.2014 city

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