With the tentative recovery of the housing market, the rental sector has received a boost as ?accidental landlords? are opting to sell their homes.
During the financial crisis, many UK homeowners who could not sell chose to turn their property into rental income, thus becoming accidental landlords. The increase of such property owners resulted in a decline of rental prices in general.
As selling has once again become a viable option, many landlords are now choosing to retreat from the market. The website of the Financial Times has reported a decline of rental property availability as a result of this. Due to this factor, both demand and prices have been on the rise over the three months ending in April 2010.
This is confirmed by the Royal Institution of Chartered Surveyors (RICS), which observed a ?sharp recovery in the residential lettings market?. In general, the number of surveyors who reported a rise rather than a fall in rental rates rose to 30 per cent, with 36 per cent expecting rental rates to continue improving.
This expectation is the highest since the start of the survey in 1998.
At the same time, the number of new landlord instructions have also declined, further affecting supply. Existing landlords can therefore look forward to a period of increased prosperity, as Jeremy Leave, a spokesman for RICS, said: ?? rents are set to move higher in the coming months and yield returns are likely to improve.?
It could therefore be a good time to enter the buy-to-let market, with demand being high and mortgage packages easier to obtain.
