LOOKING AHEAD. BELVOIR REPORTS ON MARKET PREDICTIONS FOR 2014

7 02 2014

The UK continues to edge ever closer to its European neighbours by becoming a nation of ‘renters’.  As home ownership follows a downward trend, there has been rapid growth in residential lettings with over 15% of all UK homes now in the Private Rented Sector. In Scotland, the figure is 11%

Over the past year the PRS has remained on a firm footing and despite Government ‘pump priming’ initiatives such as the ´Help to Buy´scheme, there has been no real impact on the continued demand for rental property.

We predict that in 2014, the number of people choosing to rent will continue to drive up demand. There are real indications of a recovery in the housing market with property prices predicted to rise, along with a projected 25% increase in Buy to Let (BTL) mortgage lending. With this we expect to see the re-emergence of more and more investment landlords.

We anticipate that over the next few years, new rented housing stock will come from different directions, partially from institutional investors returning to the market to provide much-needed funding.

Despite media headlines to the contrary, UK-wide residential rental incomes have not kept pace with inflation, year on year. In some areas they only increased by around 1 and 2% in 2013. Tough economic conditions and relatively high unemployment meant that many landlords were unable to raise rents but they did benefit from tenants who occupied properties for longer periods.

Belvoir anticipates modest rent increases in 2014, as the needs of tenants will continue to push up demand for quality accommodation.

KEY DEVELOPMENT
In 2014 all letting agents in England and Wales will be required to belong to a ‘consumer redness’ scheme such as the one run by The Property Ombudsman (TPO), which provides a free, fair and independent service for dealing with unresolved disputes. This new obligatory measure will help drive up professional standard. All tenants who let property through an agent rather than private landlords will be afforded higher levels of protection and direct access to the Ombudsman service.

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