Landlords are already enjoying a booming property market this year; thanks to increased tenant demand, fewer void periods and reduced tenant arrears
According to the latest buy to let quarterly index from BM Solutions, both tenant arrears and rental voids plummeted to an all time low during the last quarter of 2014 – putting landlords in a positive position early on in the New Year.
Their research reveals that just three in 10 landlords faced void periods of any length in Q4 and a similar amount (32 per cent) had experienced tenant arrears issues over the previous 12 months.
Demand from tenants has also remained consistently high as 37 per cent of landlords felt it increased during the fourth quarter while only a small minority (seven per cent) reported a decline.
Rental property demand is found to be especially strong in outer London regions, the East of England and in the South East where over two in five landlords believe demand is on the rise.
Central London saw the biggest positive rise in landlords reporting a growth in demand with the number of landlords claiming demand had risen in this area up nine per cent in Q4 compared to Q3.
Wales was at the other end of the scale with the number of landlords believing demand had grown decreasing by 11 per cent.
Landlords keen to expand
In further positive activity, it was also found that landlords have become more acquisitive by the start of 2015 as nearly one in five added a new property to their portfolio at the end of 2014.
This trend is set to continue with three in 10 landlords expecting to purchase a further rental property by the end of the year.
Even amongst small landlords (those with a single property) there is an intention to expand as one in five individuals hope to increase their portfolios over the next 12 months.
Head of BM Solutions Phil Rickards commented on the findings, noting that landlord faith in high tenant demand, low rental arrears and fewer void periods is “filtering through” to their plans to expand.
“With inflation low and the economy growing, interest rate rises are not expected any time soon, but even when they do landlords claim to be well insulated, with the typical landlord saying it would only start to cause them serious problems if they rose to 7.3 per cent,” he said.