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Buy to let rents have shattered the £700 per month barrier and are on track to surpass the previous record high of £711, according to a property letting specialist.
Average monthly rents have steadily increased throughout 2010 in line with tighter credit controls on mortgage lending from banks and building societies, says Belvoir, a lettings firm with 140 offices across the UK.
Managing director Dorian Gonsalves claims 2011 is set to become another bumper year for buy to let landlords as lenders show no sign of easing their grip on loans.
The Belvoir letting index shows tenants pay an average monthly rent of £703 for their homes. This compares with the quarter ending June 30, 2008, but is slightly down from the £711 recorded at the height of the buy to let boom in September 2008.
“The exceptional economic conditions that we are currently experiencing are predicted to continue for the foreseeable future, and means that families are becoming poorer and may have to move further afield to find employment. Potential homeowners will continue to have difficulties obtaining mortgages and saving for a deposit,” said Mr Gonsalves.
“With an estimated 490,000 public sector job cuts planned, the residential sales market is bracing itself to face another dip. Families on lower incomes will have dramatic benefit reductions, including the end of a council house for life policy.
“I think that all of these factors will result in investment landlords being attracted back to the buy to let market as they see better rental yields combined with lower purchases prices. There will also be the return of the accidental landlord who is unable or unwilling to sell their property and turns to the rental market as a viable alternative.”
Meanwhile online property portal Rightmove reports 40% of tenants believe rents will continue rising over the next 12 months.
The web site also disclosed the stock of available properties to let is down 25% compared with November 2009.
In the regular Rightmove survey of tenant confidence, 33% of tenants expect to rent for three years or more, while 55% would like to buy a home but cannot raise a deposit or find a mortgage.
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