RLA: Tenant demand is likely to remain strong, particularly in London
Those considering investing in buy-to-let properties have been advised that tenant demand is likely to remain strong in the foreseeable future.
Alan Ward, chairman at the Residential Landlords Association (RLA), said a lack of housing supply means that the ratio of tenants to available rental properties is likely to remain high, helping to support rental incomes.
However, he added that this depends on which part of the country landlords invest in, with demand in London particularly high compared to other areas.
"There isn't any indication of tenant demand slowing as long as the supply side is falling well short," he said.
"It does tend to sustain the rental levels, but it depends where you are. We have got this metropolitan split with the central London market compared to the rest of the country. In certain parts of the country, demand is perhaps slack."
His comments followed the recent publication of a report on the private rented sector by Michael Ball, professor of urban and property economics at the University of Reading, which claimed that, once inflation and other costs are taken into account, rental yields remain below 2008 levels.
This means that rents are likely to continue to increase for some time so that landlords can cover expenses such as tax and legal fees.
However, the report also called for the government to rethink the taxation and regulation of the private rented sector to prevent landlords 'disinvesting'
"The Michael Ball report from last week talked about disinvestment and the true return that landlords are making. It is of real concern that most landlords seem to discount the true cost of running their portfolios," Mr Ward commented.
"But when he speaks about disinvestment, it is not necessarily about selling the properties, but about the availability of cash to sustain and maintain the quality of the portfolio."
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