Buy to let landlords 'see rental increases'

07 July 2010

Written by Gavin Elley

Buy to let landlords saw more tenants renew their contracts last year, compared with 2008 figures, almost 40 per cent of which agreed to pay a higher rent, according to research.

The study, conducted by Capital Economics, showed that 38 per cent of individuals leasing property extended their stay with their landlord in 2009, rising from 33 per cent in 2008.

Kelvin Davidson, property economist at the firm, commented: "The scale of those rental uplifts on renewed leases may well have been viewed by many landlords as a significant success," particularly considering the level of IPD market rents at the end of the year was only three per cent above 2003's low as well as the recessionary conditions prevailing at the time.

Over the next 12 to 18 months, the expert predicted a modest expansion in the economy, which will see the income security of portfolio investors supported.

He did not believe that landlords would have the confidence to lower risk premiums in the near term, but he did expect this to happen within the year-and-a-half ahead.

Elsewhere, Nationwide recently announced that house prices increased by three per cent in the first six months of 2010, which could see the value of portfolios rise for buy to landlords.

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