UK rental market primed for growth

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by Gill Montia

HomeLet has reported a surge of optimism among UK lettings agents.

The tenant referencing and rent guarantee firm believes agents are more positive about the future of the rental market than they were less than a year ago, despite the continued lack of financing for buy-to-let mortgages.

Research by the company found that in December, 98% of agents were expecting the lettings market to stay the same, grow or grow substantially in the year ahead, with the proportion up by 12% on January 2009.

The trend reflects findings from the Association of Residential Lettings Agents (ARLA): during the final three months of 2009, 41% of ARLA members reported more tenants than properties, compared with just 24% in the previous quarter.

In addition, ARLA research among landlords revealed that 54% believe Britons are currently being forced to rent rather than buy.

HomeLet managing director, John Boyle, says: “Demand for rental properties will remain strong over the next few years as first-time buyers continue to find it difficult to obtain mortgage finance.”

He adds: “Confidence in the buy-to-let market is also likely to be buoyed by figures released by LSL Property Services which showed gains of 7.6% in the private rental sector over the last 12 months, and a gradual increase in buy-to-let lending as the year progresses.”

LSL also reported that the typical landlord achieved a return of £12,740 per property in 2009, comprising £4,831 in capital growth and £7,909 in rental income.

The figure compares with a loss of £23,000 last year, as plummeting house prices were offset by rental income of £7,900.