Rents are falling…really, claims letting agent

Buy to let rents have gone down in the past five years – not up, according to research by a leading letting agency.

The study shows average rents have dropped 2.4% in that time but are starting to stabilise.

Rents are also moving more in line with wages than inflation and represent value for money for tenants, says Belvoir Lettings, a franchise with 148 offices nationwide.

In 2008, some properties were letting for £705 a month, suggests the data, but rents slipped in 2009 and 2010 before starting to rise again in 2011.

In 2012, average monthly rents hit £682 a month, with marginal falls in September and October.

The research also suggests that rents would cost an average £113 a month more if increases had followed inflation and that much of the private rental housing stock could disappear when mortgages become more generally available and accidental landlords can sell the homes they let out.

CEO Dorian Gonsalves: “Landlords invest in property for income or capital growth. From a landlord perspective, as long as the rent is covering income, most are happy.

“Many landlords are on good value mortgage rates due to the competitive nature of the market prior to the credit crunch. With the fall in interest rates having a knock on effect particularly on tracker mortgages, many landlords are benefiting from attractively low rates, so are being able to cash flow their properties well, even with rents not rising too much over the last five years.

“Landlords also need to be aware of how their own rental income is tracking versus rents at a local level and whether they are keeping up with inflation. If not, landlords need to be looking at how they can maximise their rental income.

“One thing which is important is to secure the right balance between investing money to keep the property well maintained and ensuring voids are kept to a minimum, so rents are maximised as much as possible.”

 

 

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