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Buy-to-Let investors are helping plug the rental stock gap

June 6th 2014
By: Jon
Buy-to-Let investors are helping plug the rental stock gap

A review of the Buy to Let market by Christopher Lines, Managing Director:  for many, improvements to the sales market resulted in a dip in supply of rental properties, but we have not seen that to be the case. What we have seen is an increase of enquires from buy-to-let investors which I believe has helped to plug the gap, as well as a rise in demand from ‘older’ tenants.

Rents are still 8% higher than this time last year, however, it’s likely that the increased investment in buy-to-let properties will soon filter through to benefit tenants by helping improve supply and stabilise rents, whilst providing a greater level of choice in properties. 
Despite the upturn in sales off the back of improved mortgage lending, which would historically lead to adjustments in rental demand, applicant levels for good quality rental properties across Surrey and South West London remain strong with tenant enquiries outstripping available stock levels potentially as much as 5:1. I believe we will start to see a rise in the number of older tenants entering the rental market for the first time, notably those that don’t require a retirement residence, but who wish to release the capital on the property they own. 

We are also coming to an end with regard to the accidental landlords’ that during the ‘downturn’ could not sell, but have recently been able to sell up and take advantage of more favourable market conditions. Clearly there are now a large number of buyers looking to invest in the property market and we are currently working hard on an investor data base with view to satisfying that demand and gleaning future lettings instructions for the business.

I believe as a nation we are adapting more to renting and that this is starting to become much more the norm. The flexibility and convenience it offers enables the likes of young professionals to follow job opportunities and families to secure desirable school places for their children, without the expense and responsibility of home ownership. 

Lifestyle changes mean there is a much greater diversity of people opting to rent nowadays, and this shift in living arrangements is reflected in the change of demand for property type. Previously one and two bedroom properties were in greatest demand, whereas now I believe there is much more interest across the board, from one bed apartments right through to larger five bedroom family homes which Donna has certainly seen in Cheam. We could well see the best investment type of property going forward having three bedrooms and not the traditional one or two.