Private landlords predict higher rents

Private landlords predict rents will keep rising in 2013 – and one in 10 is expecting an increase of at least 5%.

While 40% of buy to let owners are looking at earning more from their property portfolios, just 1% of tenants are hopeful rents will drop.

The figures come from a study by leading letting agents, LSL Property Services, owner of firms like Your Move and Reeds Rains.

The firm reckons average rents are leaping up by 3.4% a month, but confident landlords expect that to rise to 4.5% in 2013.

The firm’s commercial director David Brown said: “Fierce demand from tenants has let many landlords raise their asking prices when letting properties, stopping inflation from eroding rental income – and this is likely to continue.

“Pension savers have been hit particularly hard by the Chancellor’s autumn statement and as rental yields improve, private rental property is attractive as a long-term investment.”

The research also shows around 66% of landlords forecast tenant demand will continue to grow in the next year, while 3% expect demand to fall off.

Meanwhile, property web site Rightmove expects rents to go up by 2% in 2013.

This is a slower rate of increase than the firm has reported over the past three years, when annual rises averaged 4.5%.

Rightmove disclosed 25% of landlords have already decided to put rents up.

The web site’s director Miles Shipside said: “The widening gap between tenant demand and rental property supply over the last few years has fuelled upwards pressure on rents. However, the majority of landlords now seem to be prepared to exercise constraint and are planning a ‘rent freeze’ for 2013.”

The firm’s data shows that average rents have risen by 13.64% between since September 2009 and September 2012.

Elsewhere, landlord expectations may be high, but the housing market is stagnant , according to analysts home.co.uk.

Their latest report shows asking prices dropped 0.5% in November, while fewer homes are for sale than at any time since May 2010. Average sales are taking 222 days to complete.

Prices have increased 2.4% in the last year, says the firm, but the rate is slowing down with a marginal 0.2% change in the past six months.

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