Property investors have been told to expect further years of profit by no less than a royal institution as mortgages remain out of the reach of many aspiring home owners.
Although April’s small rise in rental achievements was the first rise for several months, landlords looking to buy property insurance on further properties have no need to worry according to a report by the Royal Institute of Chartered Surveyors (RICS). A noticeable drop in rents since the turn of the year had made many industry observers wonder if the boom in the private rental sector was coming to an end but the RICS report dismisses the fall as nothing but a blip and anticipates landlords doing well for as long as mortgages remain unattainable for many prospective home owners.
RICS Director, Peter Bolton King, said their survey showed 13% more surveyors were reporting rent increases than falls and they expected more of the same in the future, he went on: “The rental market is still fairly buoyant and this looks likely to continue, given the challenges facing the sales market. Indeed, mortgage finance may become even harder to access particularly for first-time buyers if the euro crisis continues to deepen. This points to tenant demand continuing to outpace supply. As a result, rents will remain on an upward trajectory, adding to the pressure on many households whose incomes are already being squeezed.”
Not everyone in the industry agrees with the RICS findings though, with some observers believing the London market is already overpriced and that more properties coming into the sector could precipitate a drop in revenues, but for most landlords the future is still looking very promising.