Increase in demand for rental properties a bright spa...

Demand for properties in the private rented sector has increased significantly providing a welcome boost for buy-to-let landlords.

Various reports show that since letting agents were permitted to reopen on 13 May, demand for rental homes has risen at a quicker rate than the sales market.

Break-ups during lockdown, job losses and urgent relocations are thought to have contributed to the surge in tenant demand in the rental sector.

According to the latest report from RICS, 12-month sales projections remain negative, suggesting that more people will stay put in their existing homes or in the case of many would-be first-time buyers, seek to rent instead.

Respondents to the latest RICS survey noted a firm recovery in tenant demand over the three months to July (seasonally adjusted quarterly time series), posting a net balance of +35%.

Rental growth expectations for the next three months also recovered during July, with the net balance picking up to +20% from -35% previously.

For the coming 12 months, contributors continue to project rents will rise by just over 1% at the national level.

Elisabeth Kohlbach, CEO of Skwire, said: “Doom and gloom surrounding the news that the UK residential market is set for a ‘bust’ in the coming months overlooks a bright spot in a major segment of the residential market – the rental sector.

“The PRS sector is a growing part of the UK’s housing mix and the demand for this part of the market is not going away. Moreover, with lenders introducing a range of restrictions to cope with the spike in demand for mortgages following the announcement of stamp duty relief, many would-be buyers are struggling to get on the ladder and will no doubt turn to the rental market once again.

“While traditional destinations for BTR investors, such as London, may no longer be as attractive as remote workers flock to towns and cities beyond the capital, investors should look to the regions, which offer an exciting and untapped opportunity.

“Institutional investors should look beyond the traditional high density city-centre developments and seize the opportunity to tap into a rich pool of existing stock across the UK.”

Want to comment on this story? Our focus is on providing a platform for you to share your insights and views and we welcome contributions.
If any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals, then the post may be deleted and the individual immediately banned from posting in future.
Please help us by reporting comments you consider to be unduly offensive so we can review and take action if necessary. Thank you.

Robert Brown
14 August 2020 10:00 AM

I don't think btl was ever on the way down apart from overheated areas and will continue to be a good investment. However Landlords won't buy any overpriced new builds, leaving them for naive first time buyers etc. taking on unaffordable mortgages.

Andrew townshend
14 August 2020 10:49 AM

BTL isn't dead, far from it, mortgages getting harder to get, the end of the high loan to value lending, and poor job security means less owner occupier and therefore more renting. BTL works well for landlords that aren't in it to get rich quick, and for cash buyers.