Borrowing ability to dictate lettings market in 2010

"From a lettings point of view, much of what will happen next year will be governed by borrowing ability," she said.

"A recent article about investment buyers, who already have solid portfolios, were not able to purchase more properties due to lending not being there.

"Interest rates will not change in the first half of the year. However, when they do start to rise again, maybe in the middle part of 2010, then it will have an effect on the lettings industry.

"For anyone looking to upsize, for example, it could prevent them from being able to move out of their current property and rent it out rather than sell it. Potentially, this will squeeze instruction numbers, as we have already seen happen in the last couple of months.

"On the other hand, it may also encourage more people to look at renting and it will certainly sway people into deciding to stay in their current rental property while they hold out to see what will happen to the sales market. This increase in demand should bring with it stable rents and we may see these level out. As we know, these came down significantly this year, but already we are seeing prime locations benefit from better rents.

"Something we need to consider going into 2010 is ‘tenant history and affordability’. Landlords will need to be increasingly open minded as unemployment remains challenging and some tenants may well be in a position where they do not have a spotless credit history. This does not mean that tenants will necessarily be a higher risk but extra safeguarding measures can be put into place to give extra peace of mind. This will mean that being a professional agent with the landlord’s best interests in mind is going to be the best way to give the landlord that extra security.

"We have already seen landlords struggle to let their properties through private adverts this year. With a lot of legislation throughout the industry tenants are more cautious and want to use a professional agent rather than dealing direct with the landlord. I believe we will continue to see this happening in 2010.

"From the tenants’ side, we could see more requesting that all monies are passed through the agent as well as requesting that the property is managed through the agent. As much as a tenant needs to justify their suitability, tenants will also want their own peace of mind when it comes to ensuring their landlord meets their obligations.

"All of this said I do believe that we will continue to see a positive rental market, even if there are not as many new properties coming to the market. We may see more agents, ones who started to dabble in lettings when the sales market first turned, either giving up or landlords will find an alternative agent. We will most certainly continue to see more sharers, especially those who are renting for the first time, in order to spread the cost. I do not think that the election will necessarily have a direct impact on the lettings industry."

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