The boss of the UK’s leading specialist insurance provider to the lettings industry has welcomed the latest FindaProperty Rental Index revealing a rise in asking rents by 1.2% to £814 pcm. But he warned it may not be good news across the board.
John Boyle, Managing Director of HomeLet said: “This is promising news for landlords who have endured a difficult 12 months due to an oversupply in stock driving rents down.
“Thanks to accidental landlords returning to the sales market the number of available properties is reducing and pushing up rents. Potential buyers are also still struggling to meet the current mortgage requirements, especially the requirement for a minimum 20% deposit, so demand for rental property is strong.”
However he also warned that unless restrictions on buy-to-let lending are relaxed we could see a reverse of the situation last year and the UK could experience a surge in the number of reluctant tenants coupled with a severe shortage in housing.
The February FindaProperty Rental Index recorded the highest increases in rental asking prices in the north of the UK. However, HomeLet’s own rental index of actual rental prices achieved shows increases in the south and decreases in most northern areas.
According to HomeLet the areas north of London where rents rose in February were in metropolitan areas such as Birmingham and Newcastle. Everywhere else including Scotland stayed the same or dipped.
“HomeLet’s rental index shows property in the south represents a particularly good opportunity for cash-rich investors,” said John. “Also with house prices creeping up first-time buyers, particularly in the south, will continue to struggle to get a foot on the ladder.
“This could result in longer tenancies in non-student areas much like those seen on the continent. This is a positive for landlords and tenants as it gives both parties increased stability.”
As the number of people in the UK renting homes increases letting agents could face even more competition in 2010 as new letting agents open up looking to cash in on the expanding market.
“In order to remain profitable letting agents need to get ahead of the competition by providing high standards of customer service, joining professional bodies such as ARLA and the NALS and expanding their offering to clients,” said John.
As the recent ARLA Members Survey has shown tenants are still struggling to pay their rent, meaning landlords continue to be at risk of rental arrears which could force them to default on their mortgage repayments and ultimately result in the property being repossessed.
By offering clients Rent Guarantee protection in addition to other specialist tenant and landlord’s insurance products and services letting agents can add value to their services and differentiate their business from their competitors.
Notes to Editors
- HomeLet is the UK’s largest tenant referencing, Rent Guarantee and specialist insurance provider for the lettings industry and has around 3,000 approved letting agents nationwide.
- HomeLet pays out an average £3m in Rent Guarantee claims every year.
- HomeLet is proud to be a main sponsor of the Estate Agent and Letting Agent of the Year Awards 2010 and ARLA 2010 Conference and Exhibition.
.......................
HomeLet is a trading name of Barbon Insurance Group Limited which is authorised and regulated by the Financial Services Authority. Registered in England number 3135797. Registered office address: 4-9 Highview, High Street, Bordon, Hampshire GU35 0AX.
