Industry insiders are confident that the United Kingdom residential property rental market will remain strong for the rest of this year despite a weak economy. However, landlords are being urged by experts to retain a realistic approach to rent increases. There is no doubt that if potential investors seek the right advice, the returns on a property protected with cheap landlord insurance can be extremely lucrative.
A report issued by Belvoir Letting Agency predicts rents will rise moderately and remain more or less in line with both inflation and salary increases for the rest of 2012. Rental fluctuation will be very regional with some areas such as the South East seeing a higher increase as rental prices force tenants out of the capital and into the Home Counties. The current housing crisis is clearly making everyone nervous and Belvoir believe this is affecting the buy to let and mortgage market. Their research shows that tenants are now staying longer in a property and a modest rental increase will give tenants the impression that without very good reason it makes no financial sense for them to move to a different type of property. Although in recent weeks there have been reports that housing sales have increased, the report asserts the current double dip recession will have a negative impact on this. This will then produce a market that is ripe for opportunist landlords who are able to secure a property that represents real value for money.
Belvoir offices are reporting increased activity from buy to let landlords and Dorian Gonsalves, their Chief Executive, said: “Our franchise owners continue to report increased tenant demand. However unlike reports in the national press, any rental increases are likely to be modest and occurring only in pockets of the UK, with some areas experiencing no increase at all. There is a shift towards more people renting as a preferred lifestyle choice rather than from necessity. People who rent can plan their spending more accurately and have flexibility to follow job offers etc. This is becoming increasingly important in the current financial climate.”