A report produced by a professional body shows landlords in the UK are in a good position to get the maximum potential from their properties.
The July 2010 Lettings Survey, by the Royal Institution of Chartered Surveyors (RICS) shows the residential landlord is benefiting from an increase in tenants chasing fewer properties. This according to the report is reflected in the fact that 27% more chartered surveyors reported a rise in rental incomes rather than a fall, the second consecutive month this has happened.
The rise in rental values was virtually mirrored by the figures for rental demand, 26% more surveyors reported increased demand than those reporting a fall. The report also indicated the trend was nationwide, although strongest in London.
One worrying aspect of the report was that the shortage of properties causing the boom was a result of buy to let mortgages still being very difficult to obtain. As a result of this RICS predict the boom in rental properties to extend into the next quarter with 33% more surveyors expecting to see rents increase again. The survey also showed that today’s landlords expect to be taking out landlord insurance over the coming years, as only 4% said they would be selling their properties when their present tenancy agreement ended.
Summing up the report a RICS spokesman said “Supply of lettings property continued to fall in the three months to July although at the slowest pace in a year which amid rising tenant demand has helped propel rents higher for the second consecutive quarter. Existing landlords keen to expand their portfolio may still be struggling to access the necessary finance despite improved market conditions.”
However, there is a possibility the lettings market could face a modest increase in supply in the coming months. The latest RICS Housing Market Survey shows a lack of funding has stifled demand from buyers, which may cause some moderation to rents as more opt to let than sell.