The Royal Institute of Chartered Surveyors (RICS) have confirmed what most letting agents must know – that UK residential rents have increased over the last year. The national rise is 4.3% and RICS are forecasting a rise of a further 3.9% in the next 12 months.
This is due to a rise in demand for rental properties which so far this year has outstripped supply. This is good news for landlords, but harder on tenants. There are regional variations of course, but the South East is one of the areas with increasing rents despite high levels of building in the London Area.
RICS global residential director Peter Bolton King said: “. . . it is clear we have seen rents grow steadily right across the UK for some time. This is partly down to the problem of the scarcity of mortgage finance and the large deposits required by lenders.”
Buy to Let Landlords were finding no problem in securing mortgages during the same period, according to the Council of Mortgage Lenders in their report this month. They noted an increase in Buy-to-Let lending of some 25%.
Price Waterhouse Coopers are expecting a long term return on capital of some 2-3% pa over the next 13 years. They are suggesting that the returns on properties will be similar to the return from gilts and equities. John Hawksworth, Chief Economist for Pricewaterhous Coopers, said: “Given that housing returns will not be perfectly correlated with returns on equities and gilts, including housing, an investment portfolio together with these other assets could have some advantages in terms of diversifying risk.” He was also careful to point out that investing in property is not without risks in itself however.
For anyone considering starting a property portfolio as a long term investment plan Riley Marshall would be happy to discuss the merits of properties for rental and make suggestions on your shortlisted properties in terms of rental yields.
Demand is outstripping supply despite new developments across London.
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I couldn’t know that renting and owning virtually any real-estate would require that much thought, energy, and sometimes more money than everything you have. Great Informative blog in addition!