A pick up in the residential property market in the UK is good news for buy to let real estate investors as demand also rises for rentals.
Surveyors are reporting an increase in the number of prospective renters as demand increases at the same time as the amount of supply diminishes, according to the Royal Institution for Chartered Surveyors.
One of the main reasons is that so-called accidental landlords — property owners who put their houses or flats on the rental market as they couldn’t sell them in the downturn, are now selling leading to an under supply of rented accommodation.
Also more chartered surveyors have seen a rise rather than a fall in the number of people looking to rent.
‘The number of properties coming onto the rental market has slowed as the sales market has begun to stabilise. This is good news for landlords, who were coming under pressure to reduce rents as a result of oversupply,’ said a RICS spokesman.
‘The need to respond in this way is easing and providing the housing market holds firm, the outlook for the rental market should continue to improve,’ he added.
The latest figures show that 6% more surveyors reported a rise in new instructions from landlords in the three months to the end of July, compared with 21% in the previous three month period.
The balance of surveyors reporting a fall rather than a rise in rents was 29% in the quarter, compared with 55%. In an optimistic sign for buy-to-let landlords, an increasing number of agents expect rents to rise in the coming months. The balance expecting a fall rather than a rise improved from 25% to 6%, RICS said.
However, the change in sentiment could put those searching for affordable accommodation at a disadvantage. Figures from RICS, due next week, are expected to show that housing market activity continued to improve in August.