Landlords boosted by first-time buyer fears
Published 12/08/2011 | 08:00
Belfast landlords are benefiting from the nerves of would-be first time buyers, according to new research.
An investigation by online letting company Citylets found that thwarted first-time buyers were keeping the rental market buoyant while their dreams of home ownership remained unfulfilled.
Citylets' report on the private rental sector said a quarter of all properties were attracting tenants within a month, with the average time-to-let period now 44 days - the lowest figure in the last three years. The average monthly rent across all properties was £571 in the second quarter of this year, a rise of £7 on a year earlier.
Dan Cookson, an analyst for Citylets, said: "With the residential property market still in the doldrums, the rental sector is continuing to thrive - particularly in and around Belfast.
"Private landlords are benefiting from the current malaise in property prices because there are simply more people keen on renting.
"Those who would normally be looking to buy their first property after renting for a few years are waiting quite a bit longer and the rental sector is benefiting from that.
"In Belfast, the knock-on effect is that tenants are often extending their tenancies rather than moving out, so there is less movement within the existing rental stock."
Monthly rent on two-bedroom houses, which account for most property let in the city, grew 7.6% over the year from £432 to £465. Three to four bedroomed homes rose by 3.1% and 1.7% respectively.
Chris Smyth, partner at Ulster Property Sales' rental division, said the market was responding to more people moving around.
"There is still good value and supply. However, the gap between the top end of the market and the lower end is widening."
House prices have been falling in Northern Ireland for four years, with the average house price now £137,814, compared to £240,408 in 2007.
But despite falling prices, first-time buyers have found it harder to get on the property ladder as mortgage finance with banks and building societies are requiring bigger deposits from potential customers.