Rising rents are luring an increasing number of maiden buy-to-let investors.
Tenants expect further rent increases in coming months as demand for rented accommodation continues to go up.
Landlords are expected to cheer the survey findings by property website Rightmove that give them a green light to jack up rents despite falling real incomes and persistently high unemployment.
Many aspiring first-time buyers rent while they are saving up for the big deposits now required by banks. Search requests for rental property have risen by nearly two-thirds over the last two years while available rental property advertised on Rightmove’s site is down by nearly a quarter over the same period.
Half of tenants (49%) surveyed by the company last month predict rents will be higher 12 months from now, with one in seven expecting prices to go up by more than 10%. Two years ago, just 27% of tenants were forecasting higher rents. Landlords’ pricing power has increased amid a shortage of good-quality rental property and the ongoing restrictions on mortgage lending, which have decimated the number of people able to buy their own homes.
“Tenant competition in many locations is hot, partly as many tenants are staying in their current rented accommodation for longer, whilst less new stock becomes available,” says Miles Shipside, director of Rightmove.
“Further rent rises appear to be looming for many, putting additional upwards pressure on the cost of living for tenants in these inflationary times. With such fierce competition for a dwindling stock of properties, those tenants that can play the trump cards of offering the highest rent and quality references will be best-placed to win the hand and secure the keys to the home they want.”
Rising rents are luring an increasing number of buy-to-let investors. Of those who expect to buy a property to rent out in the next 12 months, 46% said they will be doing so for the first time. When asked for their reasons for investing in property, 43% said they were mainly attracted by yields, while almost a third stated it was because of the relatively poor performance of other investments such as shares.
Shipside said: “In locations where low capital values and good rental returns coincide rental property is hard to ignore as an investment option at the moment. With uncertainty about less tangible assets held in people’s pension pots, bricks and mortar once again look a more solid investment as part of your retirement planning.”
Need a Loan? Visit Secured Loans Broker.
View full post on Free Secured Loans Advice