Property News by: Madalena Penny
Landlords receiving higher yields, reflected through rents and increased demand for housing are making the most of the market at the moment. Rents caught on the radar through LSL’s property index are averaging at £713 per month and £1,025 in London respectively. Homelet estimate rents in the Capital to be averaging nearer the £1,202 mark.
And it’s not just in London that private accommodation is much sought after. Interest in rented housing stock is rocketing in the West-Midlands where tenant demand is outstripping supply. Major Mahil of Belvoir Birmingham City Centre and Belvoir Erdington, said:
“The Birmingham city centre rental market has just gone crazy. We recently rented out 45 properties in one month and tenants are actually now taking on properties without even viewing the property, but simply agreeing to apartments after looking at pictures and marketing material on the Belvoir website.
“In particular, some of our international tenants are securing properties whilst still abroad in case they miss out before they arrive in the UK for their studies. We are working incredibly hard and making sure that the property pages on our website are updated every 24 hours to ensure all properties are current and still available.
“I have spoken to some of our competitors and there are hardly any rental apartments left on the open market. This is in complete contrast to the market about four years ago when we were literally flooded with apartments and would have about 100 on our books at any one time. We are now down to our last few properties and unfortunately have been forced to turn down tenants down as we have no rental properties left.”
At the same time, the National Debtline, a charitable helpline set-up to advise consumers on debt has declared an 84% increase in the volume of calls from tenants seeking advice on rent arrears.
Chief Executive, Joanna Elson of ‘Money Advice Trust, who manages the National Debtline said:
“It is clear high rent costs are becoming more and more difficult for people to meet. A few years ago many people in today’s rent market would be planning on buying their first home, but now it seems they are struggling to even pay the rent.
“The chances of these renters being able to save the many thousands needed for a deposit are very slim indeed, which will only increase the demand for rental properties and lengthen the spiral into higher and higher rent costs.
“On top of those people who call National Debtline with specific problems in affording the rent, there will be even more who are cutting back sharply elsewhere to make sure they can cover rent payments. This in turn can lead to other debt problems, with credit cards, overdrafts and loans being relied upon to pay for food and other essentials.
“Anyone who is struggling to pay the rent should call National Debtline or visit My Money Steps online to get some free, confidential, independent advice.”
The national housing shortage has increased interest into the private rented sector as thousands more people left abandoned by mortgage restrictions and lengthy queues for council accommodation have expanded the need for private landlords.
Buy-to-let specialist, Paragon have also revealed an increase in rental income again for the third consecutive quarter, with 34% of landlords raising rent levels across the width of portfolios.
However, at first glance, it may look that landlords are capitalizing on current economic conditions, further analysis may reveal cautious action caused by BTL interest rates, fear of rental voids, rent arrears caused by housing benefit caps and unpredictable economic forecasts.
With little support from government quarters and unregulated market conditions, private landlords could be seen as erring on the side of caution.
For advice on rent arrears call free on 0808 808 4000