Residential rents set to stabilise as demand remains high
Residential rental rates are showing signs of stabilisation, after nearly a year of continuous declines, according to a report published by YourMove, one of the most prominent letting agents in the United Kingdom. National statistics suggest that rents fell by approximately 12 percent between July 2008 and February 2009. After lengthy months of negative news for residential landlords, the tides seem to be turning and May has brought a noticeable change for the buy-to-let sector, thanks to a 1 percent increase in rents. As such, these statistics show that the average rent in the UK now stands at £642. In many ways, the buy-to-let sector remains a good market for tenants, with YourMove calculating that due to the 12 percent decline in rates, the average renter is saving approximately £967 on an annual lease.
Yet the stabilisation of rental rates is not the only piece of good news that landlords can look forward to. There are two factors that together will likely help the buy-to-let sector recover during the second half of the year. First, the number of tenants looking to rent in the UK remains at historically high levels. In fact, YourMove found that there has been a 20 percent rise in the number of Britons seeking to rent residential properties over the past year. The second important factor which may help the sector’s recovery is that a large number of so-called “accidental landlords” have decided to sell their property, rather than rent it, which means that the supply of vacant homes will start to decline in the coming months.