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More UK landlords are needed to house increasing tenant demand

More UK landlords are needed to house increasing tenant demand

Attention investor landlords! Now, more than ever, your country needs you!

New data released by property website Rightmove, has shown that 63% of tenants who are currently in Private Rented Sector (PRS) residential properties expect rents to rise.

The number of tenants who expect rents to go up in the next 12 months is at a record high.

Rightmove’s data was gathered following a poll of 5,567 people who are currently renting or expecting to do so in the near future.

The survey found evidence of long-term demand, with over 33% of tenants expecting to be renting for three years or longer. This is the highest it has been since Rightmove began its consumer surveys three years ago.

With six out of ten tenants forecasting that their rents will be higher in 12 months’ time, the company said that tenants’ views were not so much music to landlords’ ears as the ‘sound of tenants crying for help’.

Although search activity by people looking for a place to rent has more than doubled in the last two years, available rental stock listed on the site is down by nearly 10%.

Miles Shipside, director of Rightmove, said: “Attention investor landlords! Now, more than ever, your country needs you! As well as potentially earning a good return on your investment compared to other asset classes, private landlords can help provide a long-term rented roof over a grateful tenant’s head. While hard-nosed rental investors may not welcome the appearance of too many new landlords if it results in downward pressure on rents, if you invest wisely it seems to be a genuine win-win of good rental yields for landlords and a secure stream of tenants paying a fair return.”

He warned that without a significant increase in rental supply, there is the danger of a rental bubble in some areas, with tenants having to commit too much of their disposable income and landlords ending up with arrears and voids.

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New property instructions coming to market have seen vendors raise the average asking price by 4.1%

The average property asking price for new instructions put on the market within the last 4 weeks is now £233,252.

The almost £11,000 increase is up from January’s average asking price of £224,060, despite a warning that much of the residential property stock already on the market in some parts of the UK, is “over-priced and unsaleable”.

Rightmove have described the highest monthly increase since April 2002, the biggest rise in UK property asking prices for nearly ten years as “a surprisingly strong uplift given the challenging economic environment”.

But it said that the rise is partly fuelled by cash-rich sectors of the market, where buyer demand is exceeding suitable property supply.

Director Miles Shipside warned property vendors: “There is pricing power if you are selling the right type of property in the right place, where enough potential buyers have access to funding. But if your local market does not have those characteristics and your price-pump is based on little more than seasonal optimism and an estate agent’s hot air, then be prepared for buyer response to be a let-down.”

He added: “In some micro-markets, sellers have the upper hand, but on the whole, a buyer with cash or a mortgage offer is the one in the driving seat.”

After depressed activity in the UK property market over the last four years, some households have decided they had to get on and move. This means that here could be a growing acceptance by the British public that the state of today’s housing market is the new norm.

Mr Shipside said: “Search activity on Rightmove is up by 19% on January 2011 and it could be a sign that some of those who can afford to move have decided to get on with their lives, driven either by desperation or by coming to terms with the constant barrage of negative economic news being the new norm. You can get tired of gloomy news or get used to it, and indeed for some cash-rich buyers, life has moved on to such an extent that it’s like the Lehman Brothers collapse never happened. Stock levels are still on the high side in some less active parts of the country, but much of that stock is perhaps over-priced and unsaleable. However, in some micro-markets, the shortage of existing and new instructions has helped contribute to the largest monthly jump in new selling asking prices for nearly a decade. While the mass-market stays at home, those that have access to funding continue to be active and have spending power, resulting in this month’s big price hike.”

Average weekly listings on Rightmove are currently 30% below 2007 (pre-credit crunch levels), with a weekly run rate of 24,406 new listings.

Rightmove’s current asking price of £233,252 appears to be £70,000 ahead of current actual property selling prices, when compared with the selling prices currently being reported by Halifax and Nationwide of £160,907 and £162,228 respectively.

The UK residential property market currently puts house buyers firmly in the driving seat, according to almost 60% of those moving home.

Figures from property website Rightmove, show that 6 in 10 of those planning to move home feel that property buyers are in a far more commanding position over property vendors.

Rightmove’s survey suggests that 30% of the country feels that UK property prices will decline in the coming 12 months and just 25% believe property prices will be higher by February 2013.

With the Olympic Games set to be hosted in London this summer, UK capital residents appear to be less negative about the housing market’s future prospects, with 1 in 3 London residents predicting that property prices in the nation’s capital will be higher than they currently are this time next year.

Director of Rightmove Miles Shipside, said: “Our survey shows that sellers in the South should have more reason to be confident than those in the North, though even within regions there is evidence of variations in confidence in local micro-markets.”

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