Tenant-Demand Still Rising

By:  Madalena Penny

Demand for rental properties has risen again, according to latest survey from RICS (The Royal Institute of Chartered Surveyors).  Affected by the lack of supply of available housing stock the survey has also revealed a rise in rental value across the UK including Scotland.

47% more surveyors reported a rise in demand in Scotland with 43% expecting rental values to rise over the next 3 months, reflecting the rise experienced in prices that have spanned the previous 3 months and the highest record of values in the Scottish private rented sector in the last two years.

It appears to be a similar story in England, with 33% more surveyors reporting increases for rental demand and a further 39% revealing a rent increase these past 3 months.  Residential landlords seeing the benefit of adding to their portfolios has been indicated by surveyors due to the possibility of increasing BTL products available.

Showing none of the seasonal decline normally associated with this time of year, demand for rental property and the increase of rents can be accredited to the usual suspects, mainly a severe shortage of housing coupled with a fall in consumer mortgage approvals.

Not surprisingly, letting agents are hard-pressed to source new rental acquisitions to keep up with the demand as tenancies are sought after across the UK with rental voids at an all time low.  In regional rental hot spots, such as London, Manchester and Liverpool to name a few, letting agents are opening additional offices to supply the influx of tenants looking for residential property.

As house prices fall again this month due to a rise of sales instructions by homeowners on the market and the continued fall in mortgage approvals, experts believe that house prices will remain stagnant for some time.

Lettings spokesman, Sim Sekhon from landlord network, ‘Legal 4 Landlords ‘said: “There has been significant development this year in the private rented sector.  The industry has attracted attention from both experienced and new investors.   There has been a steady and constant stream of demand for rental properties and landlords have recognised the potential of adding to their portfolios.”

Indicators from studies carried out within the sector are still showing no sign of a decline in rental demand or rental values despite impending government housing benefit reform.

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