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31st January 2012

Rental sector offers 'substantial value for investors'

Ian Potter, ARLA operations manager, urged anyone thinking about making a UK property investment for the first time to do plenty of research first and consult with professional list property experts as "it is vital to ensure your investment is properly protected".

The private rented sector (PRS) will continue to offer an excellent investment opportunity for buyers of buy-to-let properties, the Association of Residential Letting Agents (ARLA) has claimed.

According to the organisation's figures, 2011 saw a significant number of landlords investing in new properties.

During the last quarter of 2011, 25 per cent of landlords said they have bought a new property in the last 12 months, up from 23 per cent in the previous quarter.

Selling activity also increased, with the number of buy-to-let owners saying they sold a property rising from six to eight per cent.

Meanwhile, the number of landlords expecting to buy a new property over the coming 12 months dropped slightly in the fourth quarter of last year, but still remained at a reasonably high 25 per cent, down from 27 per cent in the preceding three month period.

Tim Hyatt, president of ARLA, said landlords can still expect to see a good return on investment in 2012, although growth will be more sustainable than in 2011.

"PRS forecasts have stated that the rental sector will still offer growth in the coming year," he commented. "Rental growth will remain robust across all sectors, albeit at a more sustainable level of around four per cent to five per cent for this year.

"This will come about in part because of the continued inactivity in the sales market but nothing like the growth we have seen for the past two years. But the PRS still represents substantial value for investors looking to enter the market or increase their participation."