Rents in UK set to rise in next five years, according to lettings agents
A third of lettings agents in the UK reported that rents increased in April, the latest data shows, and many believe they will continue rising over the next five years.
The latest monthly private rental sector report from the Association of Residential Letting Agents (ARLA) shows that in the North West some 46% of landlords reported an increase in the region.
Overall nine in 10 agents reported that they were happy with the general election result and with Labour’s rent cap proposals thrown out, 79% of ARLA agents predicted that rents will increase over the next five years.
The report also shows that in the last month, the number of landlords selling their buy to let properties has increased, particularly in London. ARLA agents in London saw the number of landlords selling their buy-to-let properties double between March and April, rising from three to six properties on average per branch.
Scottish agents saw an increase from four to seven buy to let properties going up for sale in the last month, whilst the national average increased from three to four buy to let properties up for sale on average per branch.
‘It is interesting that we have seen an increase in the amount of landlords selling their buy to let properties in the last month, which is likely to have been a result of political uncertainty,’ said David Cox, ARLA managing director.
‘We know that Labour’s plans were unpopular for many landlords and agents, so this increase in those selling their buy to let properties may have been a knee jerk reaction to the possibility of Labour’s proposals coming in to practice,’ he added.
Following the general election result earlier this month 90% ARLA letting agents were happy with the outcome of a majority Conservative government with 95% believing the result is good news for the private rented sector.
Some 13% of those agents said it was good news because the Conservatives will interfere less with the industry and 11% believe the result will provide certainty and stability to the market
In April, supply and demand remained similar to last month. On average, ARLA member branches managed 193 properties, compared to 192 in March. In April, ARLA agents reported an average of 36 prospective tenants per branch, which remains exactly the same as March.
‘It is going to be interesting to see what happens in the market in the next few months following the election result and whether we see an increase in supply of rented accommodation as a result of the Conservative’s promise to build 200,000 new starter homes offered at 20% discount to first time buyers. This policy will help first time buyers make that leap onto the housing ladder and as a result this will hopefully free up rental property,’ Cox pointed out.
‘Hopefully, now the country is under less political uncertainty, we will begin to see the market pick up again and with the policies on offer in both the rental sector and housing market we should see the overall market heading into the right direction,’ he added.