Landlords will prosper from generation rentJun 29, 2011 // Christian Reynolds
Strong demand in the rental market means landlords are in a good position to increase rents, it has been suggested.
More non-homeowners are looking to rent rather than getting on the property owning ladder and likely to continue upward. Research from Halifax shows that renting is seen as the norm and Britain is predicted to become a nation of renters within the next generation.
Many young people have given up all hope of raising a deposit to buy their own home due to being hindered by higher deposits and tougher lending criteria.
Alison Blackwell, of the National Centre for Social Research said:
“The phenomenon of Generation Rent could have major socio-economic implications. ”
“It could open up a widening of the wealth gap that already exists between homeowners and non-homeowners. And people in Generation Rent risk insufficient finances at retirement.”
According to the property website, Rightmove, rental searches are up by nearly two-thirds compared with two years ago but supply is down.
Strong demand is allowing landlord insurance policy holders to increase rents, which has already been predicted by tenants. According to the latest rental market report from Rightmove, pricing power remains with landlords.
The average rental stands at just under £700 a month. 49% of tenants say rents will definitely be higher in 12 months’ time and one in seven expects rental inflation to be above 10% over this period.
Nevertheless, 77% of non-homeowners said they still aspired to owning a home at some point in the future.
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