Taylor Scott International News
UK landlords expect annual rent growth to slow to 1.7% by next year, down from 3.7% currently, according to the latest sentiment survey. However, a quarter want to buy more rental properties this year and 60% thing it is a good time to invest in the buy to let property sector, the survey from UK lettings agent network Your Move and Reeds Rains. Overall it suggests that after a recent spurt of rent growth, landlords anticipate that rent rises will taper off over the next 12 months, seeing a sharp slowdown from the current rate of annual rent growth to a steadier trajectory. According to the latest buy to let index from Your Move and Reeds Rains, average residential rents across the UK climbed 3.7% in the year to March 2015, the fastest pace for two years, but that is set to change. Indeed, the proportion of landlords who will not raise their rents in the next 12 months has increased from 56% in September 2014 to 60% currently. Only a minority of 40% intend to increase their rental prices before March 2016. The research also shows that over the last six months some 45% of landlords have witnessed an increase in tenant demand, rising from 41% of landlords in September 2014. There has been a boost in lettings activity recently, with new tenancies agreed across England and Wales climbing 6.9% in the month to March 2015. As a result, the proportion of landlords who expect tenant demand to grow further now stands at 63%, up from 56% in January 2014. Only 3% of landlords currently anticipate demand for rental properties to fall within the next two years. However, strong demand for homes to let is a considerable factor encouraging further investment into the private rented sector. Some 60% of landlords now believe that it is a good time to invest in buy to let, a rise from 54% of property investors in September 2014. The main reason underpinning this increase in confidence is that buy to let offers better capital returns compared to other forms of investment, cited by 54% of landlords who think it is a prime time to purchase a rental property. Meanwhile 40% of property investors perceive now to be an ideal time given that current market conditions offer the opportunity to buy properties at more attractive prices, as price growth has stabilised. Some 18% of landlords have already expanded their buy to let portfolio in the last year, and a further quarter of landlords expect to purchase another rental property in the next 12 months, an uplift from 22% in September, in a sign of rising optimism in buy to let as an investment. According to Adrian Gill, director of Your Move and Reeds Rains, demand for homes to rent isn’t going to dissipate. ‘First time buyers have been thrown a lot of floating aids in the past year, most recently the reform of stamp duty… Taylor Scott International
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