Rental demand soars in UK

The Association of Residential Letting Agents (ARLA) is warning landlords not to get carried away by the steep rise in the demand for private rental accommodation resulting from the downturn in the housing market.

Hamptons International reported a 33% increase in tenancies outside London, in the first quarter of this year, mirroring the rise during the last housing downturn in the 1990s.

But ARLA is keen to point out that both the law and best practice have changed since then. The association's head of operations, Ian Potter, is concerned that some landlords may be too busy building up their businesses to comply with safety legislation or tenancy deposits requirements.

He is also keen to prevent a rise in the number of letting agents that are not members of a professional organisation.

Mr Potter would like to see all tenants and landlords protected by a properly drawn up tenancy agreement, inventories and tenancy deposit protection. Specialist insurance cover for the lettings market should also be in place, as should contracts for gas and electrical appliances, he said.

ARLA continues to promote its aims of licensing for all letting agents and membership of an accredited scheme for all landlords.

The first quarter of 2008 saw a sharp rise in demand for rental property outside London. Letting agent, Hamptons International, reported a 33% increase in tenancies across all regions beyond the capital, on the back of a slowdown in the housing market.

Over three quarters of Hamptons' tenancies are currently being renewed beyond their initial terms and new applications received have risen sharply.

In addition to the difficulties faced by potential first-time buyers in securing a mortgage, many are waiting in rental accommodation to see how far house prices will fall.

Their caution is being heightened by fears that the UK economy will enter a recession this year.

Latest property surveys indicate that confidence in the UK housing market is at an all time low and while Hamptons has reported that supply in the rental sector remained stable during the first three months of the year, stock is increasingly under pressure.

Widespread predictions that amateur landlords would flee the buy-to-let sector in the face of falling house prices and increased mortgage interest rates have so far proved to be unfounded.

BOOKMARK THIS PAGE (What is this?)