Are you having problems selling your property? Or are you considering a buy-let investment, but are unsure of the impact the credit crunch has had on the Residential lettings sector? Brilliant Student Services investigates.

According to The Association of Residential Letting Agents (ARLA), there has been a 20 per cent rise in new tenancies in the past three months with 64% of letting agents reporting that there are more tenants than available accommodation. Many of the properties on their books have appeared on the market because the owner can not sell.

Statistics show that tenants are also said to be renting for longer terms. On average tenancies are lasting 16.7 months and over 18 months in London. Landlords reveal the time in which their premises remain empty is shorter than ever, average time being 4 weeks per year.

The boost to the rental market is the result of first time buyers unable to purchase a mortgage due to higher interest rates and mortgage lenders demanding larger deposits such as Woolwich who have increased the deposit needed from 10 to 20 per cent. As a result, they are forced into renting a house until they can raise the necessary funds, but with the cost of rent escalating by 30 per cent in many regions and utility bills increasing on average 11.7 per cent, first time buyers are struggling to manage their finances sufficiently.

Mortgage lenders Paragon informs us that 54 per cent of landlords believe that the tenancy demands will continue to grow over the next year as more people will be forced to rent rather than buy.
There are other factors which have affected the rental market such as; immigration from new members of the European Union and an increased number of university students. A review published by UCAS states the total number of applicants accepted to university has increased by 9.7 per cent from 2007.

ARLA states that previous buy-let landlords are so confident with today's market conditions they will keep their property portfolio for an average of 16 years, with many landlords are seeing their rental return on their investment grow from 4.8-4.9 per cent in the past 12 months.

Nationwide issued a press release stating house prices fell a further 1.4 per cent in October resulting in house prices 14.6 percent lower than this time last year. To put this figure into perspective, the average house prices is now 158,872 almost 30,000 down on last year.

With these depressing figures; it may be worth your while to wait for house prices to recover before selling for less and with the lettings market going from strength to strength, it would be a beneficial investment.