Rental Market Outlook for 2012

publication date: May 31, 2012
 | 
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books
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Rental Market Outlook for 2012


The overall trend for rents in 2012 is for them to stabilise and in some areas which continue to suffer economically, perhaps even fall this year. Of course rental trends are slow to react unlike the ‘immediacy' of house prices, as tenants tend to stay in properties for up to two years, so don't appear as part of the rental statistics. Some tenancies have automatic annual increases; others are just renegotiated at the end of each term. As such, for some tenants who rented a couple of years ago, they may find rents have risen, whereas for someone renting a new property this year versus last, rents may well have fallen back.

From a landlord's buy to let perspective, rental income is likely to remain similar to last year, capital values are likely to remain the same or fall a little. Bearing this in mind it means in the short term (ie for 2012) neither rents nor capital values are improving at the same rate as inflation, so the reality is real returns will fall slightly short term, but long term the outlook looks a lot brighter.

For more information on whether now is a good time to buy to let, visit the Designs on Property website or purchase our Buy to Let Pack or Making Money from Property Service.

Should tenants start renting now or wait?


From a tenant perspective, it is definitely a much better idea to start renting sooner rather than later. The only real outlook for rental properties is one where prices are likely to go up, unless there is a real spike in supply which is unlikely in the short term.

This is especially the case if you are new to renting. Once you are in a home and get on well with the landlord and/or agent, they are much more likely to want to keep you in a property, so will carry out maintenance when required and if you always pay on time and keep the property in good condition, in the main you'll be rewarded with reasonable rent increases.

The idea often portrayed by the media and other organisations that a ‘bully' landlord kicks out good tenants just to get a bit more rent on a regular basis is a myth. This type of behaviour is often very rare and certainly not the norm. A good landlord knows the value of a great tenant and when you work out the financials, it's actually more costly (and risky) to secure a new tenant who pays a few more pounds a month than it would be to renew your tenant agreement.

Top tips if you are looking to rent for the first time:- 

  • Ask to see the Energy Performance Certificate on viewing (it will give you an idea of utility bill costs)
  • Find out which deposit protection scheme the landlord or agent uses
  • Check the gas safety certificate is up to date

If any landlord or agent doesn't show you the above, they are likely to be breaking the law, however great or cheap the house is, you are likely to be renting from a rogue landlord who won't look after you. So make sure you carry out these three simple checks before handing over any money.

If you are renewing your tenancy:-

  • Check the terms and conditions in the rental agreement
  • Make sure you put any requests in writing via email (read receipt) or recorded/hand delivery
  • Check rents to see if you should be negotiating rents down or likely to have an increase
  • Ideally there should be no or very low costs to renew your tenancy

Also read - Past Market Performance and Current Rental Market updates


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