Rents are cooling – but tenants still expect to pay moreMake Text Bigger
Buy to let rent increases are slowing down – but 60% of tenants still expect to pay more to landlords by the end of the year.
More than 70% believe the current letting market favours landlords, while 55% of tenants say they are ‘trapped renters’ who would like to buy but can’t afford a home, according to online property portal Rightmove.
In a rental survey, the property giant says a third of renters told them that they still expect to be letting a home in three years, while 20% have rented their current home for at least five years.
“While hard-nosed rental investors may not welcome the appearance of too many new landlords if it results in downward pressure on rents, if you invest wisely it seems to be a genuine win-win of good rental yields for landlords and a secure stream of tenants paying a fair return,” said Rightmove director Miles Shipside.
New data from the Royal Institution of Chartered Surveyors (RICS) shows rents are still rising, but at the slowest rate for two years.
Around one in eight letting agents are reporting rent increases, but RICS says this may be a sign the market has hit a plateau as new tenants are either unable or unwilling to pay higher rents.
RICS letting agents also report a strong demand for rental property.
Letting agents expect rents to grow slowly – with 14% predicting rises rather than falls.
RICS spokesperson Michael Newey said: “With many potential first time buyers forced into rented accommodation due to problems with obtaining affordable mortgage finance, rental prices have grown quickly. However, it seems that tenants may be becoming less willing to meet increasing rental values.
“While still growing, demand from potential tenants is also beginning to slow. With a recent upturn in buyers entering the sales market prior to the expiry of the stamp duty holiday in March, it seems that those who are in a position to get a foot on the property ladder may have chosen now to do so.”
Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.