Demand for rental property still strong report ARLA

The number of new tenancies has grown dramatically recently, new data has revealed, as landlords benefit from surging demand for rental accommodation.

Research conducted by the Association of Residential Letting Agents (ARLA) found that, over the last three months, new tenancies have risen by 20 per cent.

This has in turn boosted rental returns, which for houses and flats rose from 4.8 per cent to 4.9 per cent over the course of the three-month period.

Furthermore, void periods are running at just four weeks per year, while existing tenants are increasingly staying longer in properties.

Ian Potter, head of Operations at ARLA, said: "This steady rise in rental growth that we see yet again, coupled to clear evidence that there is no unusual selling, proves once again that the credit crunch effect on the private rented sector exists only in the imagination.

"This is underlined by the short void periods and length of time that tenants stay in rental properties."

Whilst we would concur with the comments made by ARLA and other industry professionals there is another point of view: There has been a significant increase in large upper end houses coming onto the rental market, purely because in the current market they cannot sell!  They were never intended as rental properties by the owners but rental is perhaps the only option when for example the owner is emigrating abroad and was counting on the sale of the property. 

Whilst there is obviously a market for all types of property, the current economic climate perhaps may have a slightly alternative outcome:  Many report that mortgage finance is so hard to come by, those who would ordinarily be buying will continue to rent strengthening demand for rental property.  This is true.  However, even tenants are being affected by the downturn in the economy so first time buyers for example, who would wish to buy but can't right now may choose to remain where they are.  Existing tenants who may have considered moving to a larger or better rental property may also choose to stay put, particularly if they are affected by increased energy bills, fuel charges, uncertainty with employment etc.

Interesting times ahead……………….