View more on these topics

Lack of finance is holding landlords back, warns RICS

John Heron
JOHN HERON RICS RESULTS NO SURPRISE

The latest lettings survey from the Royal Institution of Chartered Surveyors shows that while rents are up for the second consecutive quarter, difficulty in securing buy-to-let loans is continuing to contri-bute to a lack of supply.

Some 27% more surveyors re-ported a rise in rents rather than a fall. A year ago 29% more surveyors reported falling, and not rising, rents.

But trouble with obtaining buy-to-let mortgages is leading to the lack of supply, which has now fallen for four consecutive quarters, although at a slightly slower pace.

In the run-up to July the net balance of surveyors reporting a fall in landlord instructions was -6, in comparison with a net balance of -12 in the previous quarter.

But just 4.1% of landlords say they intended to sell their properties at the end of a tenancy agreement.

One-third more surveyors expect rents to rise over the next quarter rather than fall, with rents for houses expected to mar-ginally outperform flats.

RICS spokesman James Scott-Lee says: “Supply of lettings property continued to fall in the three months to July although at the slowest pace in a year which has helped propel rents higher for the second conse-cutive quarter. Landlords may still be struggling to access finance des-pite improved conditions.

John Heron, managing director of Paragon Mortgages, says the RICS figures echo what he has been saying for some time – that the private rented sector has to expand to meet tenant demand.

He says: “With fewer owner-occupier mortgages available, limi-ted resources in social housing and wider social and demographic changes such as a growing popu-lation and rising numbers of single person households, we are entering the age of renting.

“Unless the private rental sector is able to meet this demand, rent inflation is likely.”

Recommended

Paul Hunt

Give credit to people’s industry

Albeit in support of the greater good, opportunities in microfinancing projects in poor-world countries may be a more accessible prospect than we would first think, says Paul Hunt, managing director, Phoebus Software

Households say finances were down in August

Three in 10 households reported a drop in their finances in August, says the Markit/YouGov Household Finance Index. This reflects a decline in income and a rise in the price of goods and services.

1

Moneyfacts article on margins was silly and misleading

The article in which Moneyfacts says the margin between mortgage rates and the cost of funding to lenders through the swap rate market stands at an all-time high is silly. Even a basic grasp of economics teaches us that when demand outstrips supply then prices increase. At the moment demand for loans is greater than […]

Demand for mortgages likely to fall as BBA points to a lacklustre July

Gross mortgage lending at banks was £8.4bn in July, slightly below the previous six-month average of £8.6bn, the British Bankers’ Asso-ciation reports. Net mortgage lending by high street banks increased by £2bn in July compared with hikes of £2.1bn in June and £2.2bn in July 2009. Annual growth in banks’ mort-gage lending was 4.1%- 0.9% […]

Thumbnail

Neptune video: Abenomics: the impetus for Japan’s fast-track recovery?

The remarkable performance of the TOPIX over the past year has caused many sceptical equity investors to look again at the Japanese market. These returns have come despite very significant problems facing the Japanese economy. Chris Taylor, manager of the Neptune Japan Opportunities Fund, discusses these problems and whether Abenomics will be able to overcome them, enabling the market to continue to rise.

In the video, Taylor addresses the following:

• The size and speed of Japan’s unprecedented monetary policy
• Abenomics and the implications should it fail
• Corporate Japan and beneficiaries of government policy

Newsletter

News and expert analysis straight to your inbox

Sign up