RLA : RPI : Rental demand moves ahead

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

other artilces from the October / November 03 issue

Rental demand moves ahead - October / November 2003

Tenant demand for rented accommodation is at its strongest for two years, the Royal Institution of Chartered Surveyors has reported.

Uncertainty on house prices and frustrated first time buyers priced out of the market are among the factors reported by members.

'Rents are steady across most of the country and a net 5 per cent of surveyors expect rents to rise in most regions over the next three months', said the RICS. It put average rents throughout the country at £700 a calendar month. Although that in London is over double, at £1,560, London and the South East are expected to buck the trend and experience a decline.

Members of the Association of Residential Letting Agents also report increasing demand for rented accommodation with a rise in new tenancies aligned to 'marginal' rises in rents although again the average masked a downturn in achievable rents in London and the South East. Average void periods had remained broadly unchanged.

Despite the seemingly improved position, a small majority of members continued to say there were currently more properties than tenants.

ARLA's Index of returns on buy to let launched in September 2002 showed declines for the fourth quarter in a row. The September 2003 indices were 93.2 (against the September 2002 base of 100) for cash purchase buy to let investments, and 94.5 for those that were 75 per cent financed by borrowings.

However, ARLA is predicting overall buy to let returns over the next five years (compound rates taking account of both rental yields and capital appreciation) of 8.97 per cent for cash purchases and 18.11 per cent for geared purchases.

other artilces from the October / November 03 issue

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