A recent survey shows that renting a home is now 4.3% more expensive than a year ago. The Residemtial Lettings Survey for May to July 2012 published by the Royal Instition of Chartered Surveyors was published on 10th August 2012. The surveyors surveyed expect rents to carry on rising over the next twelve months.
There seem to be a number of factors at work. Firstly, it is still proving tough for would be buyers to find an affordable home to buy and a mortgage to buy it with. Saving for a deposit is tough in difficult economic times. Secondly, there are not enough properties to rent coming on to the market to satisfy the demand from potential tenants. Landlord insurance clients will probably be congratulating themselves on getting into and staying in the residential lettings market. However, no one knows what will happen to house prices and rents in the coming months and years. If you have to sell at a loss the fact that you enjoyed a good rental income will not be much consolation. As with so many investmants the ability to take a long term view is important. No one should become a residential landlord to make a quick buck.
According to the RICS there are wide variations in rent increases across the country. In the North West rents rose by a massive 6.9% while in Wales the surveors reported that rents had stayed the same over the last year. There is an indication that growth in demand from potential tenants may be slowing down. There was a balance of 4% of respondents reporting more rises rather than falls in interest from potential tenants. In the previous quarter the balance was 14% in favour of the surveyors reporting increases rather than falls in interest.