Rental demand rockets

Lease commencements were up more than three quarters in July 2008 from July 2007 as thousands of would-be house buyers scrap plans to get on the property ladder.

Compared to a normal year in which rental demand sees seasonal fluctuations, 2008 has seen continuous and strengthening growth. Landlords have experienced the strongest demand from tenants for decades, as property purchases slide and the ongoing mortgage drought prevents people from buying.

Managing director of Your Move estate agents, David Newnes, said: “The mortgage famine has priced a huge number of buyers out of the market – they’re choosing to rent until the market returns to normality. Demand for rented accommodation has exploded – July’s massive uplift is the biggest this year. Normally summer sees a natural slowdown as people holiday rather than move home – but this year is bucking that trend.”

Tenant demand is also rising month on month - the number of leases commencing in July 2008 rose 18% from June 2008.