Rental supply could fall, new report warns

18 2008
The savings group Skandia has warned that the volumes of rental accommodation on the market could be reduced by up to two-thirds within the next few years due to the ongoing troubles of the UK housing market.

Coming as demand for rental properties reaches a near record high across all parts of the country, the company has warned that supply could soon be reduced as many more buy-to-let investors bail out of the market.

In addition to falling equity values, many landlords are now struggling to meet their mortgage commitments, with new research from Skandia revealing that the amount of mortgages taken out by investors fell from £120 billion at the end of 2007 to a current level of just £44 billion.

"Higher mortgage rates and falling property prices will cause investors to reconsider their exposure to residential property and many will choose a more diversified approach," Nick Poyntz-Wright, the company's chief executive concluded in a note to Reuters.

Earlier this month, the country's largest buy-to-let lender reported fresh troubles, accentuating the need for tenants to be wary and to look around for the best property deals.ADNFCR-1219-ID-18737315-ADNFCR

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