Private property rents in the UK will rise moderately, remaining more or less in line with inflation and salary increases in 2012, according to one of the country’s leading lettings agents.
The Belvoir rental index, which records monthly and annual rents across Belvoir’s 140 plus UK offices, shows that rental fluctuation is very regional and this is likely to continue throughout 2012 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.
‘With regard to other areas of the UK I think rents will be relatively stable and increases are likely to be very modest. Landlords should be realistic and it is worth noting that, according to the Belvoir rental index, many areas have still not recovered to the level of rents that were being achieved in 2008,’ said Dorian Gonsalves, managing director of Belvoir Lettings.
‘I predict that increased rents and stable or decreasing house prices will result in increased rental yields in 2012. However, this is clearly very dependent on the outcome of the Eurozone crisis and its impact on credit and borrowing. The current crisis is making consumers nervous, which will affect both the buy to let and mortgage market,’ he added.
A recent phenomenon noted by Belvoir agents across the country is that of ‘double renting’ – where homeowners who are struggling to sell are now letting out their existing home to provide an on going income stream, and then moving to another lower cost rental property. Double renting helps to avoid the stamp duty and legal costs that are associated with buying and selling and enables homeowners to remain invested in the property market until the situation improves and they can sell at a profit.
‘I believe that for reasons of flexibility, mobility and budget, 2012 will see a shift towards more people viewing renting as a preferred lifestyle choice rather than a necessity. By renting a property people are able to plan their spending much more accurately and have the flexibility to follow job offers etc. These factors are becoming increasingly important, particularly in the current financial climate,’ said Gonsalves.
‘Because of the regional variations in rental yields it is very important for landlords to talk to specialists who understand the local market, as buying in the wrong area could be very costly. We are able to report on regional markets rather than providing a broad brush approach, which is not particularly helpful from a property investment perspective,’ he explained.