Rent increase expectations now at record high
Monday, 5 March 2012 9:39 AM
A record 63 per cent of private tenants expect their rent to be higher in 12 months, according to Rightmove.
The property website's consumer rental forecast shows the increase is being driven by a combination of booming demand and shrinking supply.
Demand as measured by search activity has more than doubled over the last two years while the available stock for rent is down by 10 per cent.
The top demand hotspots by search volume are London, Manchester, Bristol, Norwich, Cambridge, York, Bournemouth, Nottingham, Leeds and Milton Keynes.
Some 70 per cent of tenants say the current market favours landlords, while 55 per cent identify themselves as “trapped renters” who would like to buy but cannot afford it. A third of tenants expect to be renting for more than three years or more.
Rightmove says the big rise in the proportion of tenants expecting a rent rise from 53 per cent in the final quarter of 2011 illustrates both the extent of the growing accommodation crisis in Britain and the potential investment opportunities for landlords.
Miles Shipside, director of Rightmove said: "Attention investor landlords: now, more than ever, your country needs you!
"As well as potentially earning a good return on your investment compared to other asset classes, private landlords can help provide a long-term rented roof over a grateful tenant’s head."
There is evidence that many landlords are taking advantage of the opportunity, with research from specialist mortgage broker, Mortgages for Business, showing three in five landlords are planning to expand their portfolio in the next six months.
David Whittaker, managing director at Mortgages for Business, said: "Although overall mortgage and lending to first time buyers is finally starting to increase, landlords remain confident about the future of the private rental market and plan to expand their portfolios over the coming months.
"More and more investors are exploring which options will give them the best returns on their investment.
"While vanilla buy to let properties remain popular, more complex deals are offering higher yields on average and are growing in popularity, particularly because of the shortage of housing stock currently on the market."
The survey showed that 63 per cent will need to remortgage existing properties to fund expansion and a similar proportion do not think lenders are doing enough to support property investors.
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- landlords ,
- rental prices ,
- renting ,
- rightmove ,
- tenants
