Who is getting the best deal on rented property – landlords or tenants?

The outlook for buy to let investors and existing landlords for 2012 was certainly looking bright.For new or moving tenants however, the picture wasn’t quite so great.

They were almost certain to see a shortage of properties to choose from and continued rent rises in 2012. However, many landlords who have existing tenants who pay their rent on time, take reliable care of the property and treat it as their home will prefer to maintain the rent rather than risk raising it to cover inflation and end up losing a reliable tenant.. So for those already renting, as long as you were a good quality tenant, 2012 should have been a good year.

According to the Royal Institution of Chartered Surveyors’ Residential Lettings Survey, “rents continue to rise and are expected to increase further in the near term”. Research from their estate and lettings agents found the number of properties to let is increasing, mainly from accidental landlords who can’t sell their homes. Despite this increase in properties to let, unlike in 2008 when the market was tipped into oversupply, this time, demand appears to continue to increase at a faster rate.
This is due to existing tenants staying longer in rental accommodation so any new stock onto the market is quickly snapped up by the increasing number of tenants. Please look here for more information.

So from a stock perspective, the number of properties available for rent is always likely to rise both from accidental landlords who don’t want to or can’t sell their homes and from investor landlords taking advantage of potentially rock bottom property prices in 2012.

From the demand side, more and more people are expected to rent before they consider settling down and buying a home. Some surveys such as Oxford Economics, suggest that owner occupation has peaked in England, believing “the proportion of people living in owner occupied homes will fall from a peak of 72.5% in 2001 to 63.8% in 2021.”

The private rental sector is likely to be the main beneficiary of the decline in home ownership as it is highly unlikely there will be a net growth in the number of homes available through the social sector.

Many will start to see the growth of the rental sector as a good thing from an economic perspective as it allows increased mobility and flexibility during uncertain times, especially those who haven’t yet settled down career or family wise.
Why would anyone waste money on making freehold acquisitions and maintaining a property which could fall in value, when you can rent a great property in a good location from a landlord who foots the maintenance bill?

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