A LETTINGS agency in Huddersfield is predicting a period of “dynamic” growth for the residential property rental market in 2011– and “near-perfect” market conditions for long-term investment landlords.
Belvoir Lettings, which offices in St Peter’s Street, said that rents was rising at a time when prospective homeowners continued to face barriers to borrowing such as tight mortgage lending criteria, job-related relocation and an uncertain financial future.
Huddersfield office manager Srini Ram said: “Across our region, demand from tenants continues to grow and exceeds supply as many consumers are deciding to rent property rather than buy.”
“Consumers are feeling the pinch and are still worried about the impact of cutbacks and a possible ongoing recession and are deciding it’s wise to wait before committing themselves to a long-term house purchase.”
He said: “We are seeing a rise in residential lettings which, I believe, will continue throughout 2011.
“And with rental values expected to continue a pattern of steady growth as the year goes on, it’s never been a better time to be a landlord – or indeed a tenant – with all the security which comes with renting.”
Figures from the Association of Residential Lettings Agents show that nationwide demand for rental properties has rocketed to an eight-year high. More than 70% of letting agents across the UK reported a surge in demand – more than double the figure in 2007 at the peak of the property boom.
Belvoir managing director Dorian Gonsalves said he was optimistic about the rental market in 2011 – adding that the Government’s recent Comprehensive Spending Review will also have a significant impact.
“With hundreds of thousands of public sector job cuts planned for 2011 and families on lower incomes facing dramatic benefit reductions, there will be less ability or willingness to commit to a mortgage,” he said.
“I strongly believe that these exceptional market conditions, which include falling property prices, continued low interest rates and unprecedented tenant demand, will provide a major boost to the residential property market and a fantastic opportunity for long-term investment landlords.”
Belvoir predicts that rents could increase by some 5 to 10% over the next 12 months and that renting will remain he preferred alternative to home ownership – enabling people to become increasingly mobile in their search for the right work.
It predicts that residential sales will continue to struggle “for the foreseeable future” as banks continue to make far more difficult lending decisions.
Long-term investors in buy- to-let property will be the catalyst to attract much-needed private capital in the local residential property market, according to Belvoir.
But with the scaling down of government schemes such as Homebuy, new initiatives will be needed to increase the flow of properties onto the market and keep the recovery on track.