A Busy 2011 for UK Residential Lettings Market



Posted: Friday, April 08, 2011

by Constantin Black
Constantin

2011 continues to be a busy year for lettings agents as the demand for property remains strong. Whenever the sales market is slow moving with first time buyers unable to secure a mortgage or even when the ‘old’ time buyers are nervous about market conditions, it leads to a busy (and sometimes frantic) lettings market. This has been the case for the last couple of years for the UK, with landlords experiencing high rents and a steady flow of tenants.

In fact, tenants have found that they need to move quickly to secure a property for rent that is within their price range and that fulfils their wish list. This problem (only for tenants) is particularly acute in the well located areas of London as prime stock is always in demand and properties with good transport links even more so. One property company which operates mainly in London and the South East is Hamptons International. Lesley Cairns, Head of Lettings states that since the start of 2010, lettings activity has been especially strong with a surge in both demand for rental properties and the number of new properties being available by landlords.

If the number of new properties rose significantly above the demand then the picture for 2011 would be quite different. As it is, they rose by nearly a third in comparison to 2010 levels. However, according to Cairns, demand has increased by an even greater amount, meaning that there continues to be lack of supply in the market.

This lack of supply will keep the pressure on rental prices, which is of course good news for UK landlords who over the last couple of years have experienced substantial rental increases. On the flip side, it’s not such good news for tenants who rather than facing the fierce competition for decent rental stock will simply pay the rental increase and stay put. Cairns, also states that Hamptons International ‘see few signs that demand from new tenants will soften’ and that this remains the biggest challenge facing the lettings market this year.

One glimmer of hope for tenants who are saving for their first property is the prospect of new development stock entering the market. Although this sector still faces some problems due to the economic slow down, in areas such as London there has been resurgence. Furthermore, many products are aimed at the end user; with specialist mortgages and shared-ownership/equity schemes all designed to help tenants get onto the first rung of the property ownership market.

With the letting agents showing little signs of slowing down for 2011, it looks like it will be a busy time ahead for UK lettings agents. Tenants who want to move rental properties are advised to do their homework before giving notice and flexibility is the key factor when deciding to move
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