Tenant demand soars in private rented sector
by Daniel Jones
Landlords can expect to fill their properties easily as demand in the private rented sector soars. A "rental boom" is likely to ensure that landlords have a tenant to sign a new tenancy agreement
as soon as the current tenant leaves, new research indicates.
Over 275,000 new tenants registered for private rental accommodation in 2011, a 24 per cent increase on 2010, according to letting agent Countrywide. Nearly 80,000 new tenants registered with the firm's agents during the third quarter of 2011 alone. August generated the highest number of enquiries in the company's history.
Unsurprisingly, London saw the biggest spike in enquiries, with a 35 per cent increase in tenant applications recorded over the course of the year.
"We are in the midst of a rental boom as renting has become the new norm," says Nick Dunning, commercial director at Countrywide. "Despite gradual improvements in property levels, it is not enough to satisfy the ever-increasing levels of demand."
However, separate research from the Council of Mortgage Lenders (CML) suggests this situation is being reversed.The number of properties being bought with buy-to-let mortgages increased by around 84,000 in 2011, "modestly" helping to increase the supply of private rented housing in the UK, the CML noted.
In the fourth quarter of 2011, a total of 34,800 buy-to-let mortgages were advanced, with a total value of £4 billion. "Demand for rented property remains high, so the rationale for buy-to-let remains strong, and there is little reason to foresee any change to this positive outlook for the sector," commented CML director general Paul Smee.
But as Mr Dunning points out, there needs to be a significant amount of new private rented properties to satisfy demand. "With a record number of tenants entering the private rental sector, there is a vast shortage of properties available in all areas of UK, which could potentially fuel a steady rise in rent prices throughout 2012," he said.
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Published on: February 9, 2012
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