An oversupply of flats has been one of the main factors distorting the rental market over recent months, and October saw a significant correction in flat rental stock which fell by 12%. This is likely to be partly due to a seasonal surge in demand from students and graduates requiring lower-cost rental accommodation.
In addition, a number of agents such as Marsh & Parsons and Townends report that the strengthening sales market, which enjoyed a further 0.7% rise in house prices this month, is now attracting a rush of sellers who have been temporarily renting their properties as they wait for house prices to recover.
Rents climbed by 0.1% this month to £830, continuing the clear trend of recovery since April as competition increases among tenants seeking homes to rent. This increased demand is also reflected in the number of days properties are taking to let, which now stands at just 58 days compared to 71 days at the start of the year.
Michael O’Flynn, Director at FindaProperty.com, said:
"Buy to let landlords have had a tough time over the last eighteen months, but those who have managed to hang on in the rental market, despite a dramatic oversupply of properties, falling rents and rising unemployment among tenants, are now breathing a sigh of relief.
"Despite the fact that the economy remains uncertain and unemployment is still rising, the oversupply of rental properties is correcting itself almost as quickly as it occurred, and as long as the sales market continues to strengthen this clear out of stock is likely to continue. Rents are on a clear road to recovery with six consecutive months of stable or rising prices. Provided the ‘double dip’ theory of a second fall in sale prices doesn’t come to fruition, landlords could be set to enjoy a further recovery in rents over the coming months."
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