The Rental Market, Virginia Skilbeck, Director of Lettings, comments "The squeeze on available stock is ...fuelling rent rises"
Tuesday, February 15, 2011 by Douglas And Gordon
The main problem facing our lettings offices at the moment is a dire shortage of property. In our Chelsea office for example, as I write, we have 34 properties available to rent. This time 2 years ago, if you were looking to rent through D&G in Chelsea, you would have been able to chose between over 80 different properties! So it's a dramatically different market, offering very restricted choice to tenants, whereas landlords are often in the enviable position of having more than one offer coming through at the same time.
The squeeze on available stock is obviously fuelling rent rises and for tenants looking to renew their leases, a rent increase is always going to be unpalatable but the fact of the matter is that if you have been living in a rented property for a year, the open market rent for that property is likely to have increased by 15% since you moved in. So what do you do? Looking to move to another property to rent is likely to be a frustrating exercise; good properties in really popular areas are let within hours of coming to the market and the choice is consistently limited. For many tenants, buying is not an option. Or, for some tenants, even a desire - a high proportion of D&G tenants in areas like Kensington and Chelsea are relocated here with their job and will move on in a couple of years.
Research shows that buying in a high-value area is significantly more expensive than renting. As a tenant, a new boiler or repair to the roof is not your problem. On the downside, tenants can't decorate a property to their own tastes but most rental properties are decorated in the same bland, neutral colour throughout so tenants can start with a blank canvas and add their own furnishings to make it 'home'.
“An encouraging sign - this year we are beginning to see the return of the buy-to-let investor. Most have been watching from the sidelines for a while now but I think they are ready to jump back in. Buy-to-let finance is available again, rents are forecast to rise 10% this year and 5 year house price growth in London is predicted to be 29%...we would encourage would be landlords to buy now. D&G can help you find the right property, as that is the key to it.