Four-fifths of landlords (82%) who think now is a good time to buy rental property cited attractive property prices, while 53% mentioned strong tenant demand.
David Newnes, director of LSL Property Services, comments: “House prices are still subdued in many parts of the country and tenant demand is still growing. This is presenting landlords with the opportunity to secure strong yields on properties, and boosting confidence in buy-to-let as a long-term investment.”
The strength of tenant demand has been the key driving force behind recent rent rises, with LSL’s latest Buy-to-Let Index showing rents hit a record high of £725 in England & Wales in July. In the past six months, 44% of landlords have seen a rise in tenant demand, while just 1% have seen a decrease in demand. Investors expect this growth to continue. Two thirds of landlords (64%) anticipate demand will increase further in the next twelve months.
Four in ten landlords expect to increase rents in the coming 12 months, with just one in a hundred investors expecting they will reduce rents. Those expecting to raise rents anticipate they will do so by an average of 4.5%.
David Newnes continues: “The majority of landlords expect tenant demand will increase in the future, and as long as lending to first-time buyers remains in the doldrums, and new house building remains subdued, we won’t see demand for rental accommodation tail off. In these conditions, while affordability may increasingly come into play as landlords set rents, they are far more likely to continue to rise than tumble in the coming 12 months.”
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