posted on September 24, 2009 07:36
With the turbulant credit market, we are seeing an amazing downturn in the housing selling market. The rental market remains strong and we have seen a slight increase in the number of lets compared to last year.
As a company we have focused on our core business and continue to trade successfully and profitably. Our business was established during the last housing downturn (1990) and at that time there was a boom in the rental market.
Whilst we expect the following twelve months to be very busy we are not expecting a boom for the following reasons:
a) The Euro
With the strong euro we have noticed a number of Polish tenants leaving the country and returning home. In some locations this has resulted in many properties coming back available on the rental market and is keeping rental prices at the same level.
b) Interest Rates
Interest rates appear to be staying low, during the last recession with interest rates as high as 15% banks were not very supportive and took action to repossess much quicker than they are doing now. It is quite normal for us to see ‘receivers’ being appointed to act on behalf of banks and in most cases are keeping the same tenant.
c) Housing Stock
There are many properties available for rent at the moment and we have seen the number of vacant properties slowly increase over the past twelve months. In a rental boom there is a lack of supply and our view with the current housing stock available is that we have at least 12months to work through the current stock before we start to an increase in rent levels.
At this present time we are advising all of our clients to seriously look at purchasing additional properties in the short to medium term. We are finding the auction market to be a very good indicator of the state of the market and the recent auction at allsops showed a yield (for assured shorthold tenancies) of 7.4% Visit http://www.rapidinfo.uk.com/default.html for more information.