Long term landlords rewarded

Published 28th Oct 2009

The UK rental market looks to be strengthening as rents continue to rise and stock levels continue to fall, bringing supply back to the level seen almost a year ago - the FindaProperty.com October Rental Index found that buy to let landlords who have stayed the course over the last eighteen months are now being rewarded with a rapidly normalising market...

The 'accidental landlord' phenomenon which was generated as a result of the credit crunch has flooded the rental market with homes, meaning an imbalance in the supply/demand ratios and less chance of getting a good rental return. But now, things are looking up for those landlords who have stayed faithful to the market.

They now being rewarded with rising rents and a dramatic reduction in stock levels.

According to the FindaProperty.com October Rental Index, the number of rental properties on the market plunged by 10 per cent between September and October, following a six per cent fall the previous month, bringing supply back to the level last seen almost a year ago.

An oversupply of flats has been one of the main factors distorting the rental market over recent months, and October saw a significant correction in flat rental stock which fell by 12 per cent.

This is likely to be partly due to a seasonal surge in demand from students and graduates requiring lower-cost rental accommodation.

In addition, a number of agents such as Marsh & Parsons and Townends report that the strengthening sales market, which enjoyed a further 0.7 per cent rise in house prices this month, is now attracting a rush of sellers who have been temporarily renting their properties as they wait for house prices to recover.

Rents climbed by 0.1 per cent this month to £830, continuing the clear trend of recovery since April as competition increases among tenants seeking homes to rent. This increased demand is also reflected in the number of days properties are taking to let, which now stands at just 58 days compared to 71 days at the start of the year.

Michael O'Flynn, Director at FindaProperty.com, said, "Buy to let landlords have had a tough time over the last eighteen months, but those who have managed to hang on in the rental market, despite a dramatic oversupply of properties, falling rents and rising unemployment among tenants, are now breathing a sigh of relief.

"Despite the fact that the economy remains uncertain and unemployment is still rising, the oversupply of rental properties is correcting itself almost as quickly as it occurred, and as long as the sales market continues to strengthen this clear out of stock is likely to continue.

"Rents are on a clear road to recovery with six consecutive months of stable or rising prices. Provided the 'double dip' theory of a second fall in sale prices doesn't come to fruition, landlords could be set to enjoy a further recovery in rents over the coming months," he added.

Source: ' TMC '

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