Residential rental market shows signs of stabilization

According to an assessment published by Landlord Assist, an organization that focuses on helping residential landlords evict tenants who fail to correct rental arrears, the buy-to-let market is showing several signs of stabilization. There seems to be positive news on a number of fronts, despite the fact that buy-to-let loans are still few and far between, thus making it difficult for many landlords to expand their portfolios. But there certainly is interest in buy-to-let loans among landlords; according to some estimates, the number of landlords inquiring about such loans has risen by 50 percent over the past 12 months, with much of this increase likely happening during the second and third quarter of the current year.

Yet the number of residential properties for sale is quite low, which is helping to push prices up and partially off-set the decline in values that has hit the housing sector over the past year. Landlord Assist's general manager, Graham Kinnear, anticipates a strong "resurgence" in the residential rental sector for two main reasons. First, a growing number of Britons are looking for investments and future forms of income that can be trusted to keep pace with the rate of inflation, especially in light of very low interest rates on money invested with banks and other financial institutions. In fact, many Britons now believe that investing in the buy-to-let sector would help them supplement their anticipated pensions, once they retire. The second reason for optimism in the buy-to-let sector is that the number of foreign workers and students arriving in the UK from overseas remains very high, thus guaranteeing sustained demand for rental properties in the foreseeable future.

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On the Market January 2015
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