17:01 PM, 17th November 2011, About 12 years ago
Around 25% of landlords have invested in more buy to let property this year, says the Association of Residential Letting Agents.
Letting agents also confirm demand for letting property from would-be tenants is outstripping the number of available homes in many areas.
The favourite places for landlords to buy are Central London, the Midlands and North West – covering the big three cities of London, Birmingham and Manchester.
ARLA suggests the rising yield of buy to let properties – around 5% a year – is attractive to investors who are struggling to find a reasonable return on their cash elsewhere as Bank of England interest rates flatline at 0.5% and other financial institutions offer diminishing returns.
Around two-thirds of letting agents say rents are continuing to increase, while properties void times – the period properties stand empty between tenancies – are just 2.7 weeks. Two years ago, average void periods were four weeks.
Ian Potter of ARLA said: “Three quarters of our members are reporting that demand for rental property is outstripping supply and, with rental returns currently at 5%, anyone thinking about investing a property to rent could be well-placed to consider their options in the coming months.”
“Our research shows that prudent landlords are moving quickly to expand their portfolios, with almost a quarter (23%) reporting that they have bought properties in the last year. The most popular regions for investment are the North West, Midlands and Central London. In contrast the rest of London saw the fewest landlords buying property.”
After a series of thefts and frauds by letting agents who have made off with landlord cash running in to hundreds of thousands of pounds, ARLA warns property owners to use agents with client money protection schemes that protect deposits and rents – like the schemes run by ARLA or SafeAgent.
“The rental market is, rightly, coming under increasing scrutiny to ensure that consumers are not mistreated. Currently, anyone can become a letting agent. To protect your rights either as a landlord or tenant, it is critical therefore to check that there are measures – like client money protection – in place with your chosen agent should things go wrong,” said Potter.
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