- Fri 31 Jan 2014
There has been a lot of speculation about what is going to happen to the Lettings market, in light of a steadily improving sales market and in particular the effect on the continually popular Buy to Let arena.
The view of Lyndon Bent, Director at Bradleys Estate Agents who oversees the letting of over 1000 properties a year in Devon, Cornwall and Somerset, is that Rental sector is to remain strong. He maintains Buy to Let could feature even more than before during 2014, despite the Government’s help to Buy scheme doing its best to kill off the lettings sector by dragging more first time buyers out of tenancies. The industry pundits view of life sounds out his beliefs.
The Help to Buy scheme for New Homes has been running for some time now, yet Bradleys Let nearly 10% more homes in 2013, than the previous year, so no adverse effect seen there. The extended scheme which came into full flow at the beginning of January will undoubtedly encourage some First Time Buyers out of the rentals sector, however a recent Rightmove survey of Tenants revealed that only around 15% of them acknowledged that their savings were on track to be able to find a sufficient deposit to buy. This is of course Contrary to the widespread knowledge that Tenants would prefer to buy rather than rent. Indeed the report also shows record levels of ‘Trapped Renters’ (those who would like to buy but can’t) has risen to 60%.
Add this to the economy still driving struggling homeowners into the rentals sector points to the reality that we are not likely to see a significant change in the rental sector market for some time to come.
It must be conceded that we are currently in a period of Rental Value adjustment. MoveWithUs, who represent over 1000 estate agents across the country, issued their Rentals Index covering the last quarter of 2013, which suggests a £10 reduction in average rents in the South West. Down to an average of £780 per month, from £815 at its peak. This is a downward trend that started early last year across the country (except in London of course), but not necessarily experienced by all Bradleys offices. Indeed forecasts indicate Rental Values are now levelling out and maybe set to increase again throughout the year.
In summary, there is much for Buy to Let Landlords to look forward to this year. Property values are still competitive enough to provide good rental yields. Bradleys will continue to offer great investment opportunities to existing and aspiring Landlords by highlighting the potential yield of their properties for sale and best Buy to Let mortgage deals available though their Independent Financial Management arm.