Rental market bucks recession trend, says Belvoir Lettings…
As figures released by the Office for National Statistics confirm that the UK economy has returned to recession, Belvoir Lettings says the rental industry continues to buck the trend.
“In financial terms Belvoir has not experienced a single dip recession in the lettings industry, let alone a double dip,” says Belvoir CEO Dorian Gonsalves, but goes on to warn landlords of the importance of a realistic approach to rental increases.
“A double dip recession means that unemployment will continue to rise, which in turn may assist with the dampening of any rental increases seen in previous years,” he says. “As I predicted in December 2011 rents are likely to rise moderately, remaining more or less in line with inflation and salary increases. Rental fluctuation is likely to be very regional with some areas such as the South East likely to see a higher increase as rental prices force people out of London into the Home Counties. The current crisis is clearly making consumers nervous, affecting both the BTL and mortgage market
“My predictions were completely accurate and our franchise owners continue to report increased tenant demand. However unlike reports in the national press, any rental increases are likely to be modest and occurring only in pockets of the UK, with some areas experiencing no increase at all.
“In recent weeks there have been reports claiming that housing sales have increased, but the double dip recession is likely to have a negative impact on this. However, this then produces a market that is ripe for opportunist investment landlords who are able to secure property purchases that represent real value for money. Belvoir offices are already reporting increased activity from BTL landlords and investors.
“As I also predicted last December there is a shift towards more people renting as a preferred lifestyle choice rather than from necessity. People who rent can plan their spending more accurately and have flexibility to follow job offers etc. This is becoming increasingly important in the current financial climate.
“Feedback from franchised offices across the network shows that tenants are now staying longer in properties and there are various reasons for this. Even modest rental increases, which were heavily published in the national press, tend to give tenants the impression that without very good reason it makes no financial sense to move to a larger or different type of property.
“Because of regional variations in rental yields it is vital for landlords to talk to specialists who understand the local market, as buying in the wrong area could be very costly. With 140+ offices spread across the UK Belvoir can provide an accurate picture of the rental market in different regions and from a property investment perspective this can be very helpful. There is no doubt that if potential investors seek the right advice the returns can be extremely lucrative.”
