Rental income will rise in 2008
- 19th March 2008
- Landlord Property News
Rents in the private sector look set to increase during 2008 according to the Association of Residential Letting agents.
The survey carried out by ARLA across 429 letting agents for the last three months to the end of February, is the largest survey of its kind in the rental market. The survey shows that rents, in real terms have risen by an average 4% for houses and 2% for flats. These averages have no doubt been increased by a 9% rise in central London. Some analysts believe this could herald the start of a new housing cycle.
Average returns on rented houses are up from 4.8% to 5%, while flats have risen fro 4.9% to 5%.
Ian Potter, ARLA head of operations, says: “We are seeing the beginning of the inevitable. Whenever property prices soften or fall, rental demand, rents and yields all increase. As we begin a years of uncertainty in the sales market, it is inevitable that our member letting agents should report that they have more tenants than properties available for them.
“The supply of property in the private rented sector must rise if we are to provide for immigration as well as all the other sectors of our society who want to rent. These findings show also that we urgently need to find better cross-border referencing system if we are to satisfy landlords that they are letting to a good covenant tenants.”
It is inevitable that our member letting agents should report that they have more tenants than properties available
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