Tenant demand 'drives up rents for UK landlords'
Property professionals
6th July 2011
Growth has been witnessed in rental sector demand across the UK in recent months, as lending remains constrained following the recession.
According to research by the Royal Institution of Chartered Surveyors (Rics), higher numbers of tenants has driven up prices in the residential lettings sector.
The organisation noted there are also lower levels of properties coming onto the market, which is contributing to supply outstripping demand, with its Residential Lettings Survey revealing that 42 per cent more professionals reported an increase in tenants than a decline during the quarter to April 2011.
A growing number of individuals seeking properties to let are getting priced out of the market, Rics reports, while the number of surveyors reporting new instructions from landlords has returned to a positive net balance for the first time in two years, at plus six per cent.
In addition, tenants are choosing to stay longer in buy to let properties, meaning that fewer of them are being sold by owners, reducing availability levels still further.
Landlords themselves are also expecting rents to rise as a result of this pressure on residential housing, with a survey by LSL Property Services indicating 86 per cent of individuals polled predict they will maintain or expand their portfolios over the coming year.
A total of 68 per cent of those in the lettings market questioned said they anticipated a climb in demand from tenants during the 12-month period, although some said they are still finding it difficult to access credit, despite some signs that the market is improving.
In addition, BDRC Continental and the National Landlords Association recently published the results of research showing that 78 per cent of respondents feel positive about their role. However, 62 per cent of landlords were also found to believe that their position had become harder recently and the majority felt that they did not have the respect of the general public.
This is despite high levels of demand for homes to rent, with 49 per cent claiming that this had risen and the same proportion predicting that it will continue to do so. Furthermore, one in ten revealed they had purchased new investments in the past quarter and 16 per cent had plans to do so during the coming three months.
Comments recently made by independent property specialist Malcolm Harrison chime with the survey results, as he predicted the market will remain "very tight", with limited availability of housing.
He pointed out that many young people in the UK are currently "very dependent" on the rental market for somewhere to live, a situation he suggested looks set to continue as construction of new properties remains slow.
With a buoyant UK housing market in place and conditions expected to continue, landlords may be looking to increase their portfolios, particularly in areas where there is a shortage of decent housing and levels of demand are high.
Purchasing more properties could offer an ideal time to reassess insurance products and discuss policy needs with an experienced professionals, Giles Insurance Brokers Ltd. suggests.
According to the company's managing director, Sarah Lyons, an expert broker can provide detailed information to landlords about the sort of products that will best meet their needs and help them to access the most effective cover at a price that suits.
