What does 2011 have in store for the PropVestor: Part two: Rents

Rents

UK Property 2011

Paragon (buy-to-let mortgage specialist):

The belief that last year’s strong demand in the UK private rental sector will continue into 2011 has inspired four out of 10 landlords to plan rent rises over the coming 12 months.
41% of landlord respondents are looking to increase rents, with 30.7% of this group preparing for a 4% hike and 10% proposing a rise of between 4% and 8%.
Only 4% of landlords surveyed are likely to surprise prospective tenants with a rent reduction during 2011.

LSL Property Services, Buy-to-Let Index:

shows the average rent in the UK rising to £692 per month in November, having increased for the tenth month in a row.
November’s marginal gain was, in fact, largely driven by rents rising by 1.8% in London, to £992 per month.

BBC and ARLA (Association of Residential Letting Agents):

More people than ever are trying to find properties to rent in the UK
It says the number of tenants on agents’ books has reached a record high.
A year ago, one in four agents say demand was higher than the number of properties available but that’s now tripled to three quarters.
They say it’s down to more people being forced to rent as they can’t buy.
It means people are spending months trying to find a home and end up taking places with high rents or somewhere they don’t want to live.
ARLA, the only professional self-regulating body that looks after lettings, is concerned people will be ripped off as independent landlords join the market, start renting out properties and try to exploit desperate renters.

PropVestment

With rising demand and rising costs it is almost certain that landlords will

try put up rents, this is going to cause problems if the Government cuts housing benefits. Although rents are likely to rise, there will also be a rise in rent arrears as people just won’t be able to afford the rents, this will cause unnecessary legal costs and hassle. Our advise to landlords is not to be greedy and if an long standing tenant wants to stay on have some patience and give in a bit, it will be beneficial in the long run.

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