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Seller uncertainty bolsters rental market outlook

Tuesday 15th December 2009

With demand set to stay strong and accidental landlords set to return to the sales market, the outlook for the buy-to-let market has improved, said Lettingsearch.co.uk

Rents are also likely to increase next year, it said, pushing annual growth back into positive figures.

Phil Calderbank, director at lettingsearch.co.uk, said: “The lettings market is already undergoing a sustained period of recovery and 2010 is seen as a year of consolidation, driven by stock levels falling back to more normal levels and an increase in tenant demand as consumer uncertainty in the sales market rumbles on.

He continued: “However, with the possibility of a double dip for house prices due to the continued weak nature of the fundamentals underpinning the market, homeowners and first time buyers are expected to turn away from the sales market in the first half of 2010, preferring to let a property until more stability returns. This caution will be exacerbated by continued tight mortgage availability and the threat of further redundancies.

The conditions are likely to stabilise rents in many areas of the country next year, said Calderbank, rising in areas of particularly high demand, pushing growth back into positive figures and eventually leading to more lucrative rental yields.
As the buy-to-let lending landscape improves, professional landlords are likely to benefit and as with investments in alternative asset classes continuing to under-perform, those with liquid cash for a deposit may look to invest in further, affordable lettings properties in the second half of the year.

The firm suggested lettings hotspots next year include Medway towns such as Canterbury, Rochester and Ashford and traditionally desirable commuter towns with good schools such as Tunbridge Wells and Guildford.

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