Rental Supply and Demand
Due to the current downfall in the housing market it is becoming more and more common for people who cannot sell their properties to rent them instead.
The rental market is inundated with tenants – people who are no longer looking to buy but are hoping to find suitable rental property until the market changes. With this demand the need for supply has increased and many homeowners have found a positive outcome from this downturn in the market.
With the number of sales having fallen by 50% in the past 12 months and talk of the market falling even more, people are turning to letting their property with the hopes that the rental demand is enough to cover the mortgage they currently hold on it.
Family homes are those most in demand and with this increase in rental demand it means that rental prices have also risen whilst house prices continue to fall.
There is however a downside to this as the number of properties for rent may begin to outnumber the tenants who are looking to rent, therefore resulting in the supply outweighing the demand.
(Tuesday, August 19, 2008)