Demand for tenants has never been higher, National Landlords Association research finds
A recent report by the National landlords Association (NLA), clearly shows that the there is a healthy demand for rented property. This is reflected in tenant demand figures and feedback from landlords eager to expand their portfolio. Up to 40% of the landlords surveyed said that there was a definite increase in interest in their areas.
The surge in property demand is also having a beneficial effect on the private rental sector, with an increase in tenant demand for rented property resulting in a rise in the number of applying tenants being put through tenant referencing and background checks. Only the North East showed a decline of some 15%, whereas the east of England reported a 48% increase.
Other areas varied between these two figures, but all above 40%. The gross returns for landlords, not taking into account any mortgage or possible upkeep and maintenance costs, rose to £768 per month on average residential rents
One possible downside is that the Government is considering implementing changes in the law to abolish interest relief for landlords. It has been termed a turnover tax and in essence will restrict mortgage interest relief to the basic rate for residential landlords. This could affect over 600,000 tenancies, if landlords feel that it is therefore not viable to continue.
These new legislations will not be instantaneous, but brought in over a period of a few years. The cut in tax relief from 40% to 20% is planned to be phased in from April 2017. This at least will allow landlords time to review their individual situations and act accordingly. The long-term affect could, according to Carolyn Uphill, Chairman of the NLA, drive up the competition for homes and along with prices.
It is understandable that short-term worry is causing the Government to be lobbied, but due to the long inception date and general trends in price rises, the effect will possibly be absorbed and no dramatic change in landlord numbers take place. The interest in buy-to-let in Britain has never been higher, not only internally but from interested foreign investors who will not necessarily be affected by mortgage deals in the UK.
Buy-to-let has seen a positive resurgence over the past few years, investment renting has looked an attractive proposition, compared to low savings rates and the volatility of the stock market, as the Chinese have recently found out. Mortgages have recently been at record low rates, further increasing the popularity of buying to rent.
From the tenants’ point of view, a general lack of enough new build housing in the UK, has led to increased interest from especially the young and newly married sectors.
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