10 Things You Should Know About The Rental Sector...

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What you need to know....

1) By the end of 2011 rents slipped slightly ... except in London

Following a relentless but steady climb for most of the year, rents finally slipped in November as many landlords were anxious to keep their properties fully let in what can traditionally be a slow period. Average rents in England and Wales fell by £3.00 — the first dip in 10 months.

2 ) The reduction in rents is unlikely to continue

Locally, demand for rental homes continues to exceed supply, as many would-be buyers are forced to rent. First-time buyers' current struggle to get a mortgage could intensify in 2012 as credit may further dry up and mortgage rates could potentially rise because of the Eurozone crisis. Despite price drops, homes still remain unaffordable to many and the end of the stamp-duty holiday for first-time buyers in March certainly won't help.

3) Rising rents encourage more to flat-share

As demand for cheaper rentals swells alongside mainstream rents, it is expected that in excess of 100,000 more renters will enter the sector next year.

4) Tenants are staying put for longer

Fewer tenants are leaving their rental homes to buy. Tenants may not have the option to move, or are economically trapped, fearing they will have to pay more if they do. Lettings renewals were up by 40 per cent in 2011.

5) Investors are continuing to buy-to-let

Undoubtedly, house prices may be falling but some investors find property a superior investment than other assets. Nationally there has been a 7 per cent rise in the number of valuations carried out for buy-to-let investors in November, with many looking for bargains before prices rise.

6) Accidental landlords re-emerge

In the face of falling property values linked with a buoyant rentals market, the number of homeowners who reluctantly choose to let rather than sell their home is expected rise again in 2012. Despite Land Registry figures illustrating that prices are down by just 1.9 per cent over the past 12 months, the mood in many areas is increasingly nervous.

7 ) Steady property returns could turn to losses

Capital losses as a result of falling house prices means that if prices keep falling, an investor could expect to make an annual loss – Speak to your accountant to see if this could be turned to an advantage!

8 ) There Are Fewer tenants in arrears, but will this change in 2012

Despite rent rises, the higher cost of living and the gloomy economy, tenants have been paying their rent on time. This could be attributed to a rise in the number of financially sound tenants who would be credit-worthy buyers if they had a deposit.

9 ) More buy-to-let mortgages Investors have again been taking advantage of the re-emergence and availability of buy-to-let mortgages, however, despite the increased availability, lending to property investors is still at about half the level it was at the height of the boom.

10) Europeans invest in London in time for the Olympics

Many agents in the primary cities, are reporting a rise in the number of investors from Eurozone countries, who are looking to shelter their funds and savings from the financial turmoil on the continent. Agents in the capital also predict high demand for serviced lettings in apartments on just three-month tenancy deals over the Olympic period.