LANDLORDS are optimistic about the rentals market in 2013, with rental demand their top priority. Investors in residential property in
LANDLORDS are optimistic about the rentals market in 2013, with rental demand their top priority. Investors in residential property in the private rented sector (PRS) are optimistic about the sector in the coming year, research reveals.
Around three-quarters (76 per cent) of landlords rate the overall prospects for the PRS in 2013 at between five and eight, with 10 being the highest level of optimism, according to the Q4 research report PRS Trends from buy-to-let lender Paragon Mortgages.
The survey also asked landlords what they see as the biggest issues in the year ahead. Top of the list was rental demand (83 per cent) as the most pertinent factor, followed by rent levels (69 per cent) and tenant arrears (46 per cent).
A number of residential property investors have one eye on growth over the coming year, with 15 per cent of respondents saying they expect to purchase buy-to-let property.
Zoe Rose, head of lettings at Strutt & Parker, believes it “highly likely” that there will be an increase in tenant demand this year for rental properties. Given that buying a property in London is beyond the means of many people, Ms Rose points out that this has a knock-on effect in terms of rising demand for rental properties.
“The lower- to mid-range properties are in particularly high demand, subject to sensitive pricing and immaculate presentation,” she reveals.
“The majority of our tenants seek two-bedroom properties (49 per cent) and are aged in their 30s (38 per cent) or 40s (30 per cent). This sector are mid- to top-end corporates, predominantly from the finance sector (33 per cent) although we foresee a shift towards oil and gas as well as media and the services industry.”
The survey from Paragon Mortgages shows that almost half (47 per cent) of landlords who are planning to invest in a property this year expect to buy terraced houses and flats or maisonettes. Almost one in three (30 per cent) intend to buy semi-detached houses while 20 per cent have their eyes on multi-unit blocks. The study also shows a prevailing intention among property investors to make improvements to their existing stock, with almost two-thirds (64 per cent) having such plans for the coming year.
Perhaps most promisingly of all, the survey reveals that 41 per cent of landlords foresee an increase in tenant demand in 2013, whereas just six per cent expect it to decline.
Strutt & Parker’s in-house rentals expert Ms Rose sees a similarly encouraging picture emerging, with “well-priced and good-quality properties” being snapped up by tenants “very quickly”.
Although stock levels in prime central London are currently higher than demand, “We anticipate a re-adjustment as stock left over from 2012 is let or withdrawn from the market,” she commented.
“The peak lettings market is traditionally from March to September and Strutt & Parker anticipate that demand will increase after the early Easter break.”
“Properties that have been correctly priced, are in excellent decorative order and are in sought after locations fly off the shelf.”