Rental Prices Stabilise to Prove Maturity in the Market
Landlords across the UK witnessed impressive increases in what they were able to bring in through rental income throughout 2013, but growth levels were far slower than they were a year before, the latest report published by LSL Property Services has shown. This represents something of a levelling of prices that could be indicative of a maturing private rented sector, giving buy-to-let owners much more peace of mind that their investment can be a source of long-term income rather than just a quick way to bring in some cash in the short term.
According to the findings from LSL Property Services, the price of rent on a monthly basis increased to GBP 745 as of December, which was 1.5 per cent higher than a year before. However, this growth was only half of the approximate level of three per cent that was in evidence between the end of 2011 and the end of 2012. Monthly rents also saw a drop of one per cent, although this seasonal drop is to be expected at the end of the year.
Despite this slight month-on-month decrease in what landlords were able to bring in, the levels of activity seen during December were up, showing that the market may very well be starting to mature after two years of sharp increases in price.
Although the number of new tenancies was lower than in November, on a yearly basis, the volume of lettings increased by some 7.7 per cent in December.
“Very gradually, the clouds are clearing for tenants. Households have suffered from the most painful recession in living memory, but it’s clear we’re now coming out the other side. By investing heavily in the supply of more homes to rent landlords have played a pivotal role. Now it remains for the rest of the economy to lift real earnings, and by so doing, lift even more households out of trouble,” said David Newnes, director of LSL Property Services.
He even added that with wage prospects rising and the probability that the economy will increase substantially throughout 2014, the rental market should be very prosperous, putting the landlords operating within it in a very strong position to make the most of their investments.
Article courtesy of IPIN Global