Landlords Corner – Ups and Downs of Demand in Rental Market
It’s not a huge surprise to anyone who keeps even a casual eye on the housing market, but there is evidence demand for homes is falling. A study commissioned by Aviva, which garnered opinions from people aged 45 or less and who hadn’t bought property, suggests many first-time buyers are realistic that homeownership isn’t going to happen soon
Close to half of respondents said they aren’t searching for property right now, and an additional 16% of respondents said they have no intention of looking for a home.
This is positive news for landlords in that it indicates demand for rental property is going to remain solid for some time to come.
An Aviva spokesperson says: “The amount of support being given or intended by different generations of the family to first-time buyers is substantial. We have seen this trend, particularly of grandparents providing funding, increase in recent years. Family members are more and more willing to use wealth they have accumulated in property over the years to provide younger people with a leg up onto the property ladder.”
Some landlords might experience a dip in demand
However, it is not as if landlords and tenants are immune to the economic hardship many people face. A study of private renters aged between 18 and 35 years old suggests one in eight have moved out of rental property to save money. These people are currently living with friends, or have moved in with family members, perhaps returning home to live with parents.
The same study indicates 23% of current private tenants will make this move in 2023.
As a landlord, you must be aware of this threat, and it is always best to be proactive. Although this is an uncomfortable topic, landlords, or their property management service providers, who speak with tenants and know their future plans are better equipped to deal with change and moves.
Emma-Lou Montgomery, associate director for personal investing at Fidelity International, comments: “Times are tough with costs rising across the board and young renters are having to consider the different options on the table. While moving back home isn’t feasible or desirable for everyone, considering how you might be able to minimise the costs that you have power over Is worthwhile. It’s encouraging that while renters are making the decision to change their living arrangements due to the cost-of-living crisis many are choosing to use the money they save for longer term ambitions.”
This is not a time for anyone, including landlords and tenants, to put their head in the sand and hope things work out. This is a time for honest discussion, and to call on experts and experienced professionals for guidance.
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