Demand for properties to rent has been extremely strong over the last year, with more tenants choosing to rent for longer. This has led to a shortage of available properties to rent as fewer tenants are moving on at the end of their tenancies, choosing to renew instead.
There is still a lot of uncertainty in the economy with talk of cuts. This means many tenants are opting to stay where they are for the foreseeable future while they take a ‘wait and see’ approach. This is great news for landlords because it means rents are rising and there is virtually no risk of a well-presented, well-situated property remaining empty for any significant time.
More tenants are now choosing to take a 12 month tenancy rather than just 6 months. Many are deciding to extend their tenancies, even at an increased rent, and average tenancies are currently around 14 months which means more security for landlords.
There are huge opportunities right now for landlords looking to invest or increase their portfolios in all the areas we cover. With the sales market still very slow and buy-to-let lending improving significantly in recent months, now is an excellent time to enter the market for a long-term investment.
We are finding that good quality properties with neutral décor and modern kitchens and bathrooms are being snapped up within days, and often within hours, of coming onto the market with us.
Whilst what is most in demand always varies from area to area, we are finding that good quality one bedroom flats are letting very quickly – often within hours – in many locations. Good priced one bedroom flats are giving gross yields of up to 7 per cent.
Two and three bedroom houses are also very popular and let quickly as many tenants are not moving out of rented accommodation to the sales market but are trading up within the rental sector. This is definitely a trend we are seeing more than ever before. Two and three bedroom houses are frequently let within a few days of coming onto the market, with gross yields of around 6 per cent.
Generally, we are seeing yields improving as sales prices come under pressure and rents continue to rise.
Whilst buy-to-let looks a sound long-term investment, to minimise the risks and get the best results it is imperative to seek advice from an experienced and impartial. They can tell you about where to invest, potential rental values and yields, how to prepare your property and your legal obligations as a landlord.