Demand for Rental Property Remains High

The Residential Landlords Association is reporting that demand for residential rental properties remains high in the UK, but new statistics suggest that the number of houses and flats available to tenants is decreasing.

According to figures compiled by Key Note, more than nine out of 10 (95%) of Britons under 19 years of age intended to rent properties for the foreseeable future, yet separate numbers also show that letting agents have seen a 20% drop in the number of properties available for rent. Steve Lees, representing Key Note, added that fewer new properties are making their way into the buy-to-let market and that the number of homes for rent is showing signs of contraction. As such, tenants are often competing with each other, in order to claim properties in convenient or desirable locations.

Previous studies have shown that many students in college towns are often looking for higher quality accommodation than generations before them and are able to pay the steeper rents. As demand remains strong and while the supply of properties stagnates and even declines in some parts of the country, rents are rising.

Lees noted that for the supply of rental properties to increase, David Cameron’s coalition government would have to do more than simply enact capital gains tax (CGT) changes that are more acceptable to landlords than the previous proposals. The most important step would be to encourage banks to increase buy-to-let mortgaging. Yet even if this were to take place in the near future and more landlords invested in the rental sector, Lees predicts that the supply in rental properties would still increase at an incremental pace.