Recession may be bad for business but it’s not been all bad for all businesses. One sector of the economy which has grown steadily during the past 18 months is the private rental sector and Belvoir is leading the way. Belvoir’s Chief Executive Mike Goddard believes that the private rental sector has plenty to be bullish about as we head into a new decade. “The boom in residential lettings will continue in 2010 and, with rental values expected to increase steadily as the year goes on, I believe it’s never been a better time to be either a landlord or indeed a tenant,” says Mike.
Mike outlines some of the other changes which have affected the private rental market over the last 12 months as well providing some of his predictions for the year ahead.
The last 12 months
- Increased demand for rental property was instant so, at first, had a negative impact on the lettings business because agents were swamped by an oversupply of prospective tenants and an undersupply of landlords.
- Colleagues in the residential sales sector leapt into the lettings market leading to increased competition for quality properties. Because many of the new players had little prior understanding or experience of the sector, some tenants and landlords found themselves facing unnecessary difficulties.
- More than ever before, tenants and landlords really need to do their homework before selecting an agent to work with.
Looking ahead
- The lettings sector will continue to grow and Mike says rents could increase by some 5-6% over the next 12 months.
- Renting is now seen as a viable alternative to home ownership allowing for greater mobility. As we come out of recession people will feel more comfortable about changing jobs and become increasingly mobile in their search for the right work.
- Government plans to license all letting agents would be good for tenants and something which Belvoir would welcome. However any new regulation must be done with a light touch
Mike believes city centre building schemes which were shelved or put on ice during the recession will come back on track. - We can expect continued growth for the rural rental market as more people consider a move to the country for lifestyle reasons. New rural business parks and enterprises will boost demand for good quality properties in rural areas.
- Residential sales will continue to struggle for the foreseeable future as banks continue to make far more difficult lending decisions.
So with an election looming does Mike have any strong feelings as to which political party would be best for businesses like Belvoir and its tenant and landlord customers?
“All three main parties appear to appreciate the importance of a thriving private rental sector,” says Mike. “However any future Government needs to genuinely address the issue of personal and Government debt and I think we all need to return to the good old fashioned values of only spending what we can afford. For too long, house price inflation and profligate lending has created a false economy with an unrealistic emphasis on home ownership. Individuals have eagerly tapped into the equity in their homes to boost overall consumer spending. This situation has proved untenable in the long term and one of the main reasons why we, and other countries, have fallen into recession.”
Belvoir’s Positive Outlook for the Private Rental Sector
According to Belvoir at least, the future looks bright for Britain’s landlords and letting agents, and also for tenants who look set to benefit from improved regulation. Perhaps the Englishman’s home is no longer his castle but more just a comfortable, affordable and appropriate place to lay down his hat as he becomes increasingly mobile to take advantage of the employment opportunities which lie ahead.
“It’s all good news for the private rental sector,” says Mike. “We and our network of offices across the UK are looking forward to advising both our established clients and the new wave of tenants and landlords as we start to see the clouds of recession slowly lifting throughout 2010.”
