Rental demand rises 33%

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by Gill Montia

The first quarter of 2008 saw a sharp rise in demand for rental property outside London.

Letting agent, Hamptons International, reported a 33% increase in tenancies across all regions beyond the capital, on the back of a slowdown in the housing market.

Over three quarters of Hamptons’ tenancies are currently being renewed beyond their initial terms and new applications received have risen sharply.

In addition to the difficulties faced by potential first-time buyers in securing a mortgage, many are waiting in rental accommodation to see how far house prices will fall.

Their caution is being heightened by fears that the UK economy will enter a recession this year.

Latest property surveys indicate that confidence in the UK housing market is at an all time low and while Hamptons has reported that supply in the rental sector remained stable during the first three months of the year, stock is increasingly under pressure.

Fortunately, widespread predictions that amateur landlords would flee the buy-to-let sector in the face of falling house prices and increased mortgage interest rates have so far proved to be unfounded.

According to the agent’s data, the UK’s leading cities for landlords outside London (in terms of yields) are as follows: Brighton (4.32%), Hove (4.22%) and St Albans (4.02%).