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Rents Edge Higher in First Quarter
Date: 23rd March 2011
Nearly a third of landlords have increased rents during the first quarter of the year, research from buy-to-let mortgage specialist Paragon has revealed.
Paragon research shows that 32% of landlords have raised rents across their portfolios during the period.
One in 10 landlords said that rental income across their portfolio rose by up to 2% during the period, with a further 10% stating that it rose by between 2% and 4%. However, nearly 5% of respondents said that rental income had risen by more than 8%.
Commenting, Nigel Terrington, Paragon Group chief executive, said: “Supply and demand dictates rental pricing and landlords are experiencing significant tenant demand for their properties at present. Obviously landlords do not want to make rented accommodation unaffordable, but a considerable proportion of them have been able to make small increases to their overall rental income during the first quarter.
“Government figures show that nearly 300,000 extra households moved into privately rented accommodation in England alone last year and that is placing increasing strain on stock in the sector. It is encouraging that Buy-to-let lending increased by 22% during 2010, but more needs to be done to ensure that the private rented sector can expand to sufficiently meet tenant demand.”
The Communities and Local Government's English Housing Report, published in February, shows that the number of households renting privately has risen by one million since 2005-06, from 2.4 million to 3.4 million in 2009-10. The PRS now accounts for 15.6% of all households in England, up from 14.2% in 2008-09 and 11.7% in 2005-06. This equates to nearly one in every six households.
Paul Gillespie, Founding Partner of multi award winning sales and lettings agent Gibbs Gillespie said: “The research by Paragon reflects our experience. We manage a substantial portfolio of rental property on behalf of landlord clients and have seen a similar pattern of rental increases.
"We would however just add a cautionary note in that, with the effects of the Government’s tax increases and public sector cuts beginning to impact, we strongly advise landlords to look at the quality of tenant and their ability to meet their commitments and not just the headline rental value. It is important for landlords to avoid void periods in order to maximise the return on their investment.”
For further media information please call Jo Ryan on 020 8869 9863.