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New buy-to-let deals key to improving supply

This is the view of tenant eviction and rent recovery firm Landlord Assist.

Whilst increased tenancy demand has allowed buy-to-let investors to charge record rental returns and experience shorter void periods, many landlords have been unable to capitalise on the favourable conditions and expand their portfolios because of a lack of finance options.

With many lenders withdrawing from the sector completely and others expecting large deposits and charging higher fees for the best rates, many landlords have opted to put their expansion plans on hold, instead focusing their efforts on the performance of their current properties.

Reflecting on the sector over the past year, Graham Kinnear from Landlord Assist says:

“This year has been a year of landlord consolidation. A lack of finance available on the market has meant landlords have been unable to expand their portfolios at a time which ought to have suited investment.

“Landlords have been happy to bide their time for better rates and have focused their attentions on getting their existing stock performing to ensure they are as resilient as possible for potential interest rate increases.

“The buy-to-let sector can play a pivotal role in addressing the shortage of quality housing. However, only when lending restrictions are lifted can we expect to see the supply and demand of rental properties balance itself out.”

Despite these concerns, Stephen Parry, Commercial Director of Landlord Assist, expects the level of demand for rental properties to continue throughout 2011.

“Many would-be first-time buyers have opted for rented accommodation due to the lack of availability of mortgage funding and instability of the market. At the same time tenants already in rented properties are extending their tenancy agreements and are renting for longer periods. We expect these factors to continue to define the market during 2011.”

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