I’m going to avoid saying too much about the Mortgage Market Review but it’s hard to ignore the fact that the regulator’s plan to make lenders responsible for affordability could increase the price of mortgages and ensure people are priced out of the housing market.
Combine this with concern over the stability of house prices and lingering fears of a double-dip recession, and it’s clear that rental demand will continue to grow.
Indeed, Countrywide recently reported record demand. It saw 50,480 new tenants register for rental accommodation in Q2 2010, representing a 16% rise since the beginning of the year.
June saw the sharpest increase, with over 18,000 new tenants registering – the highest number in a month since its records began and 22% more than in May.
The rise in demand is in stark contrast to the fall in the number of new properties being offered, which has fallen 6% in the past three months.
Despite the recent hike in Capital Gains Tax Countrywide suggests this has not deterred new landlords from entering the market, as their number rose by 6% in Q2.
As we are still to reach the peak rental season driven by student demand landlords appear to be in the box seat in terms of rental demand. But the lack of competitive buy-to-let deals continues to curtail growth.
Hopefully, innovative lenders with robust funding lines will emerge soon to drive this sector and offer professional portfolio landlords more opportunities to cope with growing demand.