The latest Residential Lettings Survey from the Royal Institution of Charted Surveyors (RICS) suggests that tenant demand in the UK’s private sector is increasingly growing at a faster pace before new property’s can even become available.
Contrary to recent reports suggesting that rents are beginning to stabilise in many parts of the country, the RICS have predicted that on average rents are to increase by 2% over the next year, furthermore rent expectations have remained quite positive and have been so since the middle of 2009.
The survey which was conducted before the 2013 Budget announcement which introduced the Help to Buy initiative, points out that it not only extended the existing shared equity scheme for new build property’s but also promised of a more embracing mortgage guarantee which is too take effect from the beginning of next year.
In relation to this demand in the private rented property sector, Simon Rubinsohn, RICS chief economist has said “while the rental market remains buoyant at present, it will be interesting to see whether the Help to Buy scheme begins to encourage some tenants back to the owner occupier market as more higher loan to value mortgages become available. Even if that proves to be the case, however, it is improbable that we will see much evidence of this before 2014.”
Central London, meanwhile, is experiencing a strong rental market so far this year, with figures showing that the number of residential lets have increased by 110% only in the first quarter of this year in comparison with the first quarter of 2012.
Nevertheless rents are currently 3.63% below last year and 6% below the highs of 2008 in some cases, with tenants paying an average of £502 per week.
‘This can only be attributed to the fact that supply is now outweighing demand, and unless landlords ensure their properties are presented in immaculate condition, as well as being realistically priced, they will not attract tenants,’ states Mr Javier Carrillo, lettings manager.
With Central London at the height of the rental market, RICS suggest that this is due to the foreign tenants, of whom are students, who are opting to study in London this year, resulting in the increase of rents that are only afforded by foreign tenants.
With the rental market progressing quite rapidly in many regions, this can mean many landlords and tenants will require assistance in either writing up a tenancy agreement, a contract or even checking a tenancy agreement.
If you are a landlord or tenant, our dedicated team of solicitors at Douglas Wemyss will be more than happy to assist you further. please call (0116) 2999199 to make a no obligatory appointment.