Rental Growth in the UK Reaches Record Levels

  • 17 years ago
  • Uncategorized
The Royal Institute of Chartered Surveyors recently released its lettings survey for the 2nd quarter of 2007, and it shows that buy-to-let investors are increasingly moving into the residential real estate market as rents rise. This quarterly survey provides a comprehensive look at the lettings market in England, Wales and Scotland. It includes trends in tenant demand, rent expectations and average monthly rents.
29% more Chartered Surveyors reported a rise in tenant lettings, which is up from 15% in the previous quarter. Tenant demand for rental property has been boosted by accessibility concerns in the housing market as the market slows and many investors wait to see how the current market plays out.
Moving forward, surveyors expect rental growth in flats to continue through the autumn at least. The current uncertainty in interest rates is making would-be buyers wait to see what happens before investing in property.
While the current market is favorable for rental properties, the on-going problems in the sub-prime market will make new investments in rental properties a bit trickier in the coming months. Tighter requirements will make it more difficult for investors to purchase properties, and potentially higher interest rates will increase the need for higher rents.
RICS spokesman Jeremy Leaf noted that: “Current economic uncertainty has created an ideal platform for buy-to-let investors to cash in on rising rental levels.”
“Rising rents are offering some compensation for landlords that are experiencing higher borrowing costs although buy-to-let investment will struggle in 2008 as lenders become more discriminating, especially for ‘sub prime’ properties.”
Whatever happens in the market going forward now is a good time to own rental property in the UK.
HMO Buy to Let Property also appears to be an area where investors can benefit; multiple tenanted houses are in a shortage near universities as the student population expands.
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