UK rental market expected to stabilise in 2012
09 January 2012
Rental charges for private properties in the UK will stabilise in 2012, keeping in line with inflation, the Belvoir rental index claims.
The index, which keeps a record of monthly and annual rental costs, suggests that 2012 will see the private property market stabilise, with rent changes staying in line with salary increases and the rate of inflation.The Managing Director for the agency, Dorian Gonsalves, stated that the company “predict[s] that increased rents and stable or decreasing house prices will result in increased rental yields in 2012.”
Gonsalves was eager to emphasise that the current Euro-Zone crisis would impact this, however, stating that the unease felt by individuals would “affect both the buy to let and mortgage market.”
According to Belvoir’s data, regional differences are still experienced across the property market and this is something which is unlikely to change over the coming year.
The South East has been named as one area projected to experience a higher increase in rental prices as people move out of the country’s capital and into its surrounding Home Counties.
These increases, however, are expected to remain manageable, with Gonsalves predicting they will not increase above the rate of inflation or income increases.
“Rents will be relatively stable and increases are likely to be very modest” he explained.
Alongside the forecasts for the property market over the coming twelve months, Gonsalves also commented on trends which have been witnessed by the agency over past months.
Belvoir Lettings revealed that a system known as ‘double renting’ has become popular across the UK, giving homeowners a constant income from the rent of their previous home. This allows them to live in a lower priced property, receiving regular rent from their previous home until the market improves and they can sell the property for a more favourable amount.
Gonsalves predicted that this option would continue to be popular this year and stated that “2012 will see a shift towards more people viewing renting as a preferred lifestyle choice”.
He also emphasised the need for landlords to research the market and region they intend to invest in thoroughly before considering these options, explaining that buying in the wrong area could potentially cost individuals money.
