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16th September 2011

Landlord News - A Summary of the Latest Reports & Market Commentary

It seems one can’t open a newspaper at the moment without coming across a good news story for landlords. The past few weeks has seen a range of reports published which all point to further strengthening of the private rented sector. We summarise some of the latest rental sector reports below:

August Rents Hit Record High - LSL Buy-to-Let Index

According to the latest index from property services group LSL, last month the average rent in England and Wales grew to £713 per month. This represents a 1.2% monthly increase - the largest since August 2010. Given the rapidly increasing demand for rental property over the past year, and the fact that seasonally, August is one of the busiest lettings month of the year – we expect this trend to continue as the imbalance of supply of rental property and demand from tenants persists. Increasing rental yields coupled with a patchy sales market and historically low prices in some areas typically act as a trigger for many investors seeking to broaden their rental property portfolios.

Landlord Optimism Grows – NLA report

The National Landlords Association Optimism Index has shown that a 65% majority of landlords rated prospects for their lettings over the next quarter as good or very good. This is however based on a national survey, and at Martin & Co we would expect more local landlord sentiment in Cambridge’s booming rental market – with its high rents and strong tenant demand - to exceed the national average. In contrast however, the NLA survey did show a drop in confidence over the wider state of the economy, with only 6% of respondents rating this positively, compared to 9% one year ago. Our view, shared by many industry commentators, is that many of the current economic challenges and continuing uncertainty are actually boosting the prospects for landlords and the private rented sector as a whole.

1 in 6 Homes Now a Private Rental Property – Says Government Department

Communities and Local Government has released its latest figures on housing tenure which show that owner occupancy has fallen to it lowest level this century, with the number of people privately renting reaching its peak. Now, 17.4% of homes are rented, an increase of 1% since 2009 and representing up to 229,000 new rented properties. However, since 2000, the number of properties in the sector has leaped by a staggering 1.8 million and now stands at 3.9 million rented homes. This dramatic rise reflects a major shift in housing tenures in England, which for the most part, has emerged as a result of an uncertain economy and more specifically a troubled housing sales and mortgage finance market, job instability and a lack of suitable homes.

More Family Households turn to Renting - Findaproperty Survey

Property website Findaproperty.com has released statistics showing a rise in rental asking prices of nearly 5% in the past year. A spokesperson for the website claims that since 2009, average rent rises had primarily been driven by demands for flats, however, in the past few months, data has indicated growing demand for family homes, with competitiveness within the sector lifting rents further. This development points to the fact that more people from a wider range of household are either choosing or finding it necessary to rent instead of buy a property – a trend widely expected to continue as the UK’s private rented sector continues to grow.