The lettings market during 2011 was characterised by exceptionally high demand for accommodation with many tenants having to compete for a limited supply of properties. This led to rising rents, attractive yields and greater confidence in the market for landlords.
Looking ahead into 2012, Dorset’s leading letting specialist, Allan & Bath, predicts the market will be similar in terms of strong demand, but that property stocks will begin to improve as investors turn to the PRS as a viable alternative to the volatile stock market and low interest rates.
Says Allan & Bath’s Poole branch manager, Tony Wilson: “We are seeing a small but significant increase in enquiries from buy to let landlords seeking our advice at the initial stage of purchasing which suggests that investment in the PRS will increase. In addition to new investment, we expect more rental properties to come onto the market from people giving up on the sales market, and from people who inherit property choosing to let rather than sell. We are also seeing some long-term tenants moving out of the sector once they have saved a deposit to buy their own homes which is freeing up accommodation for new tenants.
“This will be good for renters as it will facilitate more movement for those relying on the PRS over the medium to long-term. Many couples and families need to move up the rental ladder to larger properties which will ensure continued demand across all property types.”
Allan & Bath report that one and two bedroom flats around Bournemouth town centre are particularly sought after, with premium rents being achieved for those that are well furnished and immaculately presented. Further out, unfurnished houses and bungalows are very much in demand.
“We had a very busy 2011 and the market here remains healthy for investment landlords. Many of our landlords saw their rental income increase significantly last year but we believe rent levels will remain fairly static throughout 2012 despite the high demand.
It is crucial that rents reflect these cost-conscious times; if a property is priced too high it will not let. An independent expert is key to valuing the property to ensure the best possible rent is achieved without risking costly void periods.”
Whilst market conditions will remain positive for landlords and look set to improve for tenants during 2012, Allan & Bath issues a warning about the continued lack of legislation in the industry.
Says Tony: “2011 saw the government confirming that it has no plans to regulate letting agents, a decision we were very disappointed by. At a time when more people than ever are turning to this sector, landlords and tenants need protection from unscrupulous and incompetent letting agents.
Many are unaware that there is no proper regulation governing letting agents, despite the plethora of legislation that applies to letting itself. If letting agents do not know and comply with the regulations, properties can be unsafe, client money can be at risk and the landlord’s and tenant’s interests unprotected during the tenancy. Landlords should be aware that they can be held liable for their agent’s actions or inactions and can face severe penalties including hefty fines and even imprisonment.
With formal regulation of letting agents unlikely, Allan & Bath’s advice to landlords and tenants is simple: only use an agent with many years experience, a good reputation and above all, that is a member of a professional body such as ARLA, NAEA or RICS.
These organisations are self-regulating and ensure that member agents comply with a rigorous code of conduct and that clients’ money is held in separate, properly protected accounts.
For advice you can trust on all aspects of renting or letting in your area please contact Allan & Bath on:
Bournemouth: 01202 292000
Poole: 01202 687000
ENDS
Posted 12-01-2012
