What's happening with rental prices?

Recently, there's been a lot of talk in the national press about an increase in rental prices. People are beginning to struggle to buy houses currently due to the new strict lending criteria, and people also aren't moving out of rental property, so if you're looking for somewhere nice to rent, it's a lot harder to find something than it was say 12 months ago.

So have we seen rental prices increasing as a result? Certainly not across the board is the answer, and there are probably a few reasons for this:

1.               The natural time to change the rent is when your tenant vacates and you have a new one going in - only this isn't happening much at the moment. To change the rent, landlords have to apply for an increase mid tenancy - and whilst there is confidence in the market, it's still a brave landlord who calls his tenants bluff and risks losing them over a small rental increase.

2.               Property condition remains a massive factor in a Landlords ability to increase rent. When the newspapers state there is a shortage of rental property, they mean a shortage of good quality rental property. Whatever the market conditions, there's never a shortage of poor quality property to rent, and it's always hard to command a premium rent if the property is in poor order.

3.               In certain sectors of the market, there's still oversupply of property. Two bedroom apartments in Margate for example, are still in plentiful supply (70 out of the 148 properties currently available to rent in Margate are two bedroom flats), and getting a significant rental increase in this area is tricky business.

And what does the future hold for rental prices?  This isn't an easy question to answer, and if you ask three different 'experts', you'll get three different responses. As such the brutally honest response is probably "who knows"!

From my own perspective, I believe very strongly that the answer remains tied in to people's ability to buy property - as long as this remains difficult, people will have no choice other than to rent. This should keep demand high, and hold prices up too. If you are a landlord that has good quality property, you shouldn't have a problem 1) attracting a good quality tenant and 2) charging a decent rent. This hasn't always been the case though, so don't 3) start to think it's the norm and 4) base your future financial decisions on it!

Pop in and see us along Northdown road for some impartial advice if you are thinking of investing in property OR if you want me to look into a specific area or property for you then why not email me the details and I’ll happily help you out. (gavin.horton@belvoirlettings.com)

Whilst dining out the other evening the fire alarm went off in the restaurant, the waiter, who had been making me laugh all night, was quick to allay everyones fears with the following quip!

Well I thought it was funny!