Member Article

Good outlook for renting in 2014, but housing ladder to remain “distant dream” for many

Rising property prices and a shortage of affordable homes will leave the property ladder “out of reach” for many young people in 2014 but mean a positive year for renters and landlords – that’s the prediction of one North East property expert.

Britain’s largest mortgage lender the Halifax this week forecast that house prices will rise by 8% in 2014, with Ajay Jagota of North East lettings agency KIS Lettings believing that this will leave getting the keys to their first home “a distant dream” for first time buyers.

The figures came at the same time as research showing that the number of affordable homes being built in England falling by 26% to the lowest level since the 1920s – less than a third of the number needed to keep up with demand.

The founder of KIS Lettings –named Letting Agent of the Year at the 2013 Landlord and Letting Awards– believes that so-called “accidental landlords” could hold the key to solving Britain’s growing housing crisis.

Ajay, who manages properties for 700 landlords from branches in Sunderland, South Shields, North Shields and Welwyn Garden City, said.

“Rising property prices get a lot of media attention and are usually seen as a positive economic sign, but that comes at a cost – it can put the property ladder out of reach for many first-time buyers and leave owning a home a distant dream for many.

“That leaves the rental sector with a crucial role to play in making sure there are enough good quality, affordable, homes to go around – and that could include people who aren’t landlords at the moment and never planned to be.

“There’s a lot of anecdotal evidence that there are a lot of people looking to take their second step on the property ladder who aren’t able to move on as new buyers are not coming forward to buy their first homes.

“At the same time there are properties they could afford sitting empty – and people queuing up to rent good quality houses like theirs. With Britain needing in the region of 200,000 new homes just a few thousand people taking the plunge as an accidental landlord could make a huge difference.

“It is of course a very daunting step – but with the right support it can be a straight-forward, rewarding process.

“Culturally Britain is becoming more and more a nation of renters and I’d expect to see a fifth of households in rented homes by 2020. 2014 promises to be a very positive year for the private rented sector, once during which I would also expect to see increased investment from landlords, meaning more choice and a higher standard of rented homes – good news for landlords and renters alike”.

This was posted in Bdaily's Members' News section by Ajay Jagota .