Tenant demand continues to drive up rents
by Sarah Ashcroft
Fresh tenant demand has driven rents up further in the three months to the end of April, new figures from the Royal Institution of Chartered Surveyors show. The organisation's latest Residential Lettings Market Survey reveals 13 per cent more chartered surveyors reported rents rose rather than fell during the period.
This was driven mainly by increasing demand as a net balance of 15 per cent more respondents reported rises in prospective tenants, with houses in greater demand than flats. Rental values in the UK have now grown consistently since 2009 as the problem of unaffordable mortgage finance and large deposits required by banks forces more into the private rented sector.
As for the rest of 2012, things are looking positive for landlords, explains Peter Bolton King, Rics global residential director. "The rental market is still fairly buoyant and this looks likely to continue, given the challenges facing the sales market," he says.
"Indeed, mortgage finance may become even harder to access particularly for first-time buyers if the euro crisis continues to deepen.
"This points to tenant demand continuing to outpace supply. As a result, rents will remain on an upward trajectory, adding to the pressure on many households whose incomes are already being squeezed."
But rising rents and continued stagnation in the housing market means more so-called unintentional landlords are likely to enter the private rented sector. These first-time landlords, although able to capitalise on good rental yields, need to be careful with how they approach the market.
Nick Long, managing director of Towergate Insurance's specialist household division, explains how important it is for landlords to take precautions, such as carrying out a thorough property inventory
, before taking on tenants. Other things to consider are insurance, deposits and reference checks.Evictions
are another thing people entering the market for the first time may not think too much about. But this is another important stage to consider.
"The majority of tenancy agreements
come to a natural and amicable end, but if problems do occur, landlords must supply good proof for eviction, such as non-payment of rent for more than eight weeks or breaking the terms of the tenancy agreement," explains Mr Long.
- Get a solicitor-approved tenancy agreement, section 21 notice, inventory and rent guarantee agreement all in one download for just £29.99 with Lawpack's Landlord Saver Pack.
Published on: May 30, 2012
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