UK Market Forces Still Dominate Rental Sector


Dominate Rental Sector – There is no doubt that this summer will prove to be a testing time for the nerves of Home builders, Developers, Housing Associations, Mortgage Brokers, Surveyors, Estate Agents, Solicitors, Investors and First-Time Buyers. Continual and relentless media speculation suggests at the very best mixed messages and uncertainty; and at the worst an imminent market bust.

 Dominate Rental Sector

Dominate Rental Sector – The reality, as experienced economists know, is that the UK housing market is ‘counter-cyclical’. In boom periods, home owners and investors gain appreciation on their properties. Rental income and tenant demand usually declines, before levelling out. When the market dips, tenant demand and rents both rise, albeit that the property depreciates. In most instances house prices tend to decrease during the downturn


According to the Association of Residential Letting Agents, the value of rental properties- both flats and houses, decreased in the six months to February 2008. A few years ago, plenty of people would simply buy a flat as an investment vehicle in the hope- justified back then, that the value would go up. They didn’t even bother trying to find tenants, the flats would just sit empty and a few years later they’d be sold at a profit. Those days are definitely behind us now.


Lucinda Richardson, Lettings Manager of Winkworth said, “January saw our best month ever with incredible levels of activity supporting continued price growth. Overall business was up by 20 per cent year on year, much of which resulted from new business. Renewals remain extremely strong as well, most being agreed with rent increases of some 5-10 per cent. The driving force behind this activity has been the uncertainty of the sale market; those who might otherwise be buyers have rented instead.”


Letting specialists Leaders, with offices in Hampshire, Surrey and Sussex give a similar picture. The company has enjoyed a busy start to 2008. Their lettings are up from the previous year, and up from the start of this year. The Company say there has been no significant change over the year, in the number of rental properties being withdrawn from the rental market in order to be sold. Leaders believe the fears that Landlords will sell up if prices continue to fall are unfounded. Their landlords say they are in it for the long term and this is echoed in other surveys of the rental market.


Following Leaders latest growth, with new branches opening in Bracknell and Aldershot earlier this month, Paul Weller, Managing Director at Leaders, in a statement said Leaders plans to acquire further branches across the Home Counties and to further expand by many more strategic acquisitions over the coming months and years.




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