Residential landlords are increasingly confident of the private rented sector with 68% expecting their letting business over the next three months to be either good or very good.
According to the latest Rent Check report, produced by BDRC Continental and Allsop LLP, it is nearly back to the pre-recession level recorded in Q3 2007 of 71%. Up to 23% of landlords are looking to expand their letting portfolio, and only 7% plan to sell their rental property in the next 12 months.
The report found that the government’s Help to Buy scheme has not affected private landlords’ confidence in the business of letting. In the latest National Landlords’ Association Tenants’ Panel survey, 27% of tenants plan to buy a home, but more – 39% – will continue to rent.
The vast majority of tenants in the study – 91% - said that their rented property was their “home” rather than a temporary roof over their heads.
Although the average tenant’s stay in a rented property is now two-and-a-half years, 75% of tenants have been renting privately for over four years – and 41% of these have been in the same property for the entire time. The tenants who stay in rented properties the longest are the retired (an average of three years) and families (2.8 years).
A comparison of rates over the past 13 months to September 2013 for two-bed flats and three-bed properties show that most areas have seen an increase in rental rates. The most significant rises were in the South West and East Midlands. Price drops were experienced in five regions: the East of England, Wales, the North West, Yorkshire and central London (Zones 1-2).
Paul Winstanley, partner at Allsop, said: “Increasing property prices combined with strong and, in many regions, rising rents are solidifying landlords’ commitment to the private rented sector, encouraging them to expand rather than contract their rental portfolios. For tenants this means a commitment to hold their properties for the long term, which, despite tenants’ fears on the contrary, is likely to signify greater security and longer tenancies.”
Mark Long, director at BDRC Continental, added: “The data we have collected for the latest Rent Check report points to an extremely positive outlook for the private rental sector. This report will dispel a number of myths around rent inflation and tenancy duration, presenting, we think, a more balanced view of the sector’s dynamics.”