Rent rises good news for buy to let
3 December 2009
Surveyors expect to see rent rises in the UK next year as the number of rental properties coming onto the market fell for the first time since January 2008.
The latest RICS lettings survey said that the recent upward turn in the housing market seems to have led to a decrease in the number of rental properties available, particularly houses. The most significant rental price increases are being seen in central London and the north of England.
Central London
Demand for rental property is still rising, particularly for houses, with almost a quarter of surveyors reporting rising rather than falling numbers of people looking to rent. Tenant demand was strongest in central London, but increased in most other parts of the country, except the east.
RICS spokesperson Jeremy Leaf said: “It seems the current upward trend in the housing market is having a more significant effect on the lettings market, with many of the accidental landlords returning to the sales market to take advantage of the recent price increases. As a result the recent oversupply is reversing, with new instructions at the lowest levels we have seen. This of course is impacting on prices and tenants no longer have as strong a bargaining power as they did.”
South east
Findings from the Rightmove Consumer Confidence Survey suggested that many renters would prefer to buy, but cannot afford to. In Surrey, Sussex, Berkshire, Buckinghamshire, Kent, Oxfordshire and Hampshire, 65% of renters can’t afford to buy.
Miles Shipside, commercial director of Rightmove said: “Demand for rental properties looks set to remain buoyant while property sales prices stay out of the reach of those tenants who would prefer to buy. On top of this, restrictive mortgage lending criteria looks set to keep many would-be buyers trapped in rented accommodation.”
Buying agent Tracy Kellett of BDI Home Finders said: “Buy to let is again looking like an attractive proposition in the UK as rental prices increase and demand for quality rental properties is set to rise.
“But people looking for a buy to let investment property need to be aware that not all properties or areas are right for buy to let. Working with a homefinder who has expertise in the UK buy to let market is one way to ensure your investment doesn’t go bad.”
For more information about BDI Home Finders please call us on 0845 603 6110 or contact us by email.
