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Rental demand ‘going through the roof'

House sales in the UK are plummeting, but the UK lettings market is soaring as a result.

According to new data from estate agent Your Move, a leading UK lettings agent, demand for rented accommodation in June grew 38% year on year

Lease commencements were up 38% in June 2008 from June 2007 as thousands of would-be house buyers scrap plans to get on the property ladder.

Landlords have seen the strongest demand for tenants for decades, following a fall in property purchases since the start of the credit crunch. 

Young buyers have been driven out of the market and into renting by the disappearance of 100 per cent and 95 per cent mortgages. 

Tenant demand is still rising month on month - the number of leases commencing in June 2008 rose 3% from May 2008.

Managing director of Your Move estate agents, David Newnes, said: "The credit crunch has buried any chances most first time buyers might have had of getting on the property ladder. 

"Mortgage finance hasn't been this hard to come by for fifteen years - but for landlords this is a cloud with a gold-plated lining."

June's increase in tenant demand is part of a wider trend.  In May 2008 the number of leases commencing was 41% higher than the year before.  The number of leases commencing in 2008 in total is up 34% on the same period in 2007. 

Mr Newnes added: "There has been a stellar rise in the number of people looking to rent since the credit crunch began to kick in. 

"The criteria banks and building societies use for deciding how much you can borrow have got a lot tougher.  People who would have fallen into the first time buyer bracket a year ago are now renting.

"Opportunities to invest are ripe for professional landlords able to secure financing.  With rising tenant demand comes rising rents - buy-to-let yields will consequently improve. 

"House prices are under pressure at the moment, and there's scope for buy-to-let investors with collateral to get good deals to expand their portfolios".