The recent report that Yorkshire and Humber rental rates have increased by 7 percent over the last year are cause to dig deeper into the factors causing this trend. The other concern is exactly what this trend means in terms of a housing recovery. The two concerns are strongly related.
Yorkshire and Humber are interesting communities where the majority of homes are owner occupied. The availability of a substantially larger section of true residential properties helps tenants who are disappointed by the mortgage market but also reflects a hesitation to buy homes by qualified buyers.
This brings into question the motivation to own a home. In today’s global economy, employees who are subject to job movement are no longer buying with recognition that they may very well lose money if they are transferred in the next two or three years. These mobile employees are prone to rent and bank their money. They do not want to be responsible for maintenance.
The Mobile Tenant
This new mobile tenant wants good school districts, safe, truly residential communities and Internet capabilities that allow work at home. Being near a good transport system and airports are also advantages. These busy road warriors want to keep it simple, a nice family environment but also the ability to pack and move when the next big deal comes around. That is the reality of a large number of UK tenants.
Then, there is another group of renters. This group is a little bitter and questions the merits of homeownership altogether. The have been burned by the tight mortgage market. The have seen housing process fall and cause substantial portfolio losses. These potential buyers are more likely renters because they have lost faith in the financial community and the hype over real estate values. In the UK, this c
lass of tenant wants the conveniences of locking the door and leaving whenever they want. Tenants like knowing the house is secure and the grounds will be maintained. They have no intention of fixing roofs, repairing plumbing or dealing with the responsibilities associated with homeownership problems. Instead, they are saving and investing their money and waiting for the market to bottom.
Low Confidence Rate
The toll of the recession has been most vicious for the employment marketplace and the housing market. Whereas potential buyers were optimistic about the value of real estate, believing it a safe investment over time, that concept does not hold up with 21st century young working men and women. These people want to work hard and play hard and not bother with how politicians struggle with the financial crisis. For converting today’s tenants to buyers is going to require significant incentives and possibly some assurances.
[author] [author_image timthumb=’on’][/author_image] [author_info]This article was provided by Aylesbury Letting Agents, Bannisters.[/author_info] [/author]
