RLA : RPI : Rental market strong but could be stronger

News from the Residential Property Investor, the bi-monthly magazine for RLA members

other artilces from the October / November 2001 issue

Rental market strong but could be stronger - October / November 2001

Increased demand for rental property and higher rents have been reported by chartered surveyors for the three months ended July 2001.

But the market would have been even stronger had not potential tenants been put off by bad structural conditions, poor maintenance, bad decor and lack of parking in the properties on offer, they have told the Royal Institution of Chartered Surveyors.

In a special study for its latest survey the RICS asked members to list the main factors that stopped potential tenants from letting. Top of the list came 'condition', with 52 per cent of chartered surveyors reporting this as a constraint. Next came lack of suitably sized properties (48 per cent), high cost relative to buying (42 per cent), lack of available properties (furnished 31 per cent, unfurnished 29 per cent), uncertain tenancy agreement renewal on long term lets (28 per cent), and tenancy agreement terms (10 per cent).

With more investors entering the residential letting market because of the weakness of shares, more properties have become available for letting in recent months, said the RICS. And while the stock markets of the world remain uncertain, UK house prices continue to climb although 'conflicting influences' will affect the lettings market in the coming quarter.

'It is expected that high house prices combined with economic uncertainties will stimulate the lettings market as many potential first time buyers turn to rented accommodation instead. But at the same time the slowdown in the residential market will reduce the number of investors looking to enter the lettings sector and reduce the number of properties available', said the RICS.

As the economy weakens corporate lets are also expected to slow, especially in London where they account for 28 per cent of the market, against 12per cent nationally.

'This survey highlights the fact that landlords have to meet the expectations of ten ants if they are to be successful', said RICS residential lettings spokesman, Jeremy Leaf. 'People expect high standards these days, and this applies just as much to the lettings market as elsewhere'.

* Meanwhile the latest RICS house price survey for the three months to July shows 'no let up in the housing market boom' as yet. But, it said, 'signs are appearing that suggest the end is in sight'.

Price rises have been fuelled by demand outstripping supply, but many chartered surveyors are saying that prices are now beginning to stabilise as enquiries fall off, suggesting that buyers may be starting to balk at further rises.

other artilces from the October / November 2001 issue