Rental costs fall, boosting rental demand

The cost of renting fell slightly in January, increasing the demand for rental properties across the UK, a new survey has suggested.

According to research conducted by an independent property services firm, rent arrears also fell slightly when compared with the previous month - which is news that will be welcomed by landlords. In January, the average rent dropped by 0.3 per cent in from the month before in England and Wales, settling at £682 a month.

With many potential first time buyers still unable to secure a mortgage, the majority are continuing to rent, which has boosted demand for property for rent.

David Newnes of LSL told BBC News that the dip in typical rents suggested signs of a rebound in the buy-to-let sector.

"With more products coming onto the market, there are signs that this trend is continuing into 2011, allowing a growing number of professional landlords to get onto the market or broaden their portfolios and take advantage of near-record rental income and strong tenant demand."

He also added that it could partially be attributed to less people signing a rental contract in December and January, leading landlords to lower their rents in order to combat this typical pattern. 

Posted 18-02-2011
Author: Hannah McLaverty-Williamson