Shortages for private rented residential property

Citation

(1998), "Shortages for private rented residential property", Property Management, Vol. 16 No. 2. https://doi.org/10.1108/pm.1998.11316bab.017

Shortages for private rented residential property

Shortages for private rented residential property

Keywords Property market, Residential

A growing shortage of private rented housing is highlighted by the Royal Institution of Chartered Surveyors' (RICS) new survey of the residential lettings market, published November 1997. Just over half of the 180 respondents (51 per cent) cited investment as the main reason for letting.

In the three months to the end of October respondents reported increases in both activity and instructions to let, with greater activity expected over the coming months.

Changing social trends and the need for a more mobile workforce have established renting as a flexible alternative to buying; while the introduction of the Housing Act and the added security of the Assured Shorthold Tenancy have enhanced the appeal of letting property among potential landlords. In London the lettings market has proved particularly strong. Rent increases are in evidence as demand continues to outstrip supply.

The shortage of rented accommodation is likely to worsen, the survey reveals, as only 76 per cent of landlords apparently choose to re-let their properties. Reasons for not re-letting ranged from a perception that capital values may have peaked, to difficulties in regaining possession and getting departing tenants to repair damage factors which may also deter some first-time landlords.

RICS spokesman Jeremy Leaf commented:

Although activity in the housing sales market is not always inversely proportional to activity in the lettings market, certain factors ­ recent interest rate rises, shortages of supply and a perception that the housing market may be overheating ­ have boosted activity in the rental market.

We are seeing an increase in the number of landlords turning to renting out properties as an investment. In the light of recent turbulence in the stock markets and with letting yields reaching 10 per cent, the lettings market has been seen as an attractive alternative investment for those looking for a less volatile income source.

For a copy of the survey please contact the press office on 0171 334 3723.