41% of landlords looking to increase rents in 2011

Landlord Expert
By Landlord Expert January 5, 2011 08:57

Research from buy-to-let specialist Paragon Group has revealed that 41% of the landlords it polled are planning to increase rents during the next 12 months.

A further 55% plan to keep rents at 2010 levels and just 4% are looking to reduce the amount of rent they are charging.

Of those looking to increase rental prices, one in ten landlords are aiming to increase the rent they charge tenants by an inflation-busting 4% to 8%.

Nearly a third plan to increase rents by up to 4% of the current value.

Latest figures showed consumer prices inflation (CPI) at 3.3% in November and retail price inflation at 4.7%.

In October, This is Money reported that rents had hit an all time high, with the average tenant paying £689 a month. And that average is far outstripped in London, where average rent is £972.

This is making it even more difficult for first-time buyers to save for a deposit on a house.

The average deposit put down by first-time buyers according to Council of Mortgage Lenders figures is a shade under 25%.

On a £125,000 home this equals £31,250 – a huge savings target for anyone hoping to buy without assistance.

Landlords are also in a buoyant mood when it comes to demand, with 45% predicting growing levels of people looking to rent and a further 44% forecasting already high demand to remain steady.

They have reason to be confident. Rents in the private rented sector steadily grew throughout 2010, according to the Royal Institution of Chartered Surveyors (Rics). More surveyors recorded rent increases than falls in each of the first three quarters of the year.

Nigel Terrington, chief executive of Paragon, which polled 182 landlords, said: 'Landlords are in a strong position. Tenant demand has risen faster than supply during 2010 and that is expected to continue well into 2011.

'This is reflected in landlords' expectations of future levels of tenant demand and also the rent they are planning to charge for their properties.

'There continues to be a lack of finance available in the UK mortgage market, meaning that many potential buyers are opting to rent instead.'

Read more: http://www.thisismoney.co.uk/mortgages-and-homes/buy-to-let/article.html?in_article_id=520744&in_page_id=56#ixzz1A9KcvzHD

Landlord Expert
By Landlord Expert January 5, 2011 08:57

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