Increase in Private Landlords could reduce Rent prices

Landlords from the private rented sector have been coming under fire recently due to the fact that many members of the public are finding it difficult to afford the increasing rent prices. However, the cost of rent is directly linked to the fact that there is not enough housing in the UK, and that landlords are more likely to be given loans to buy properties instead of first time buyers. However, this disposition towards landlords may soon change, as it was reported in The Independent today that the increase in private rental sector landlords will actually help reduce rent prices.

Rightmove has released its latest figures which state that the increase in landlords investing in buy-to-let properties will mean that there will be more affordable housing available to the UK public. Mile Shipside, director and housing market analyst at Rightmove said: “Buy-to-let investors, attracted by evidence of sustained demand and strong yields, will provide much needed supply relief to ‘Generation Rent’. A marketplace where landlords are achieving satisfactory returns will relieve some of the supply pressure in 2013, though the task seems to be falling on the comparatively rag-tag army of private landlords rather than more strategic institutional investment.”

The research has also shown that one in eight accidental landlords are now thinking of expanding their portfolios due to such good return on investment on their properties. Currently, around thirty per cent of landlords are accidental landlords, but almost forty four per cent are thinking about investing further in the buy-to-let sector this year. This will not only be good news for tenants, but also landlord insurance providers as they will also hopefully benefit from the increase in involvement in the landlord industry.

Shipside said: “In locations where property prices have fallen substantially or rents have risen more dramatically, landlords have invested and many seem willing to invest again. Some higher priced areas remain unattractive to the hard-nosed investor or risk-averse lenders. Those areas will continue to see the supply of rental property outstripped by demand putting further upwards pressure on rents. However, overall greater supply of rental property coming on tap is good news for tenants as it is likely to lessen the pace of rental growth in 2013.”