Lettings chain Belvoir is predicting only moderate rises in rent this year and is urging landlords to be realistic.
Dorian Gonsalves, managing director of Belvoir Lettings, said: “I predict that rents will rise moderately, remaining more or less in line with inflation and salary increases.
“The Belvoir rental index, which records monthly and annual rents across Belvoir’s 140-plus UK offices, shows that rental fluctuation is very regional and this is likely to continue throughout 2012, with some areas such as the South-East likely to see a higher increase as rental prices force people out of London into the Home Counties.
“With regard to other areas of the UK, I think rents will be relatively stable and increases are likely to be very modest.
“Landlords should be realistic, and it is worth noting that, according to the Belvoir rental index, many areas have still not recovered to the level of rents that were being achieved in 2008.”
He went on: “I predict that increased rents and stable or decreasing house prices will result in increased rental yields in 2012. However, this is clearly very dependent on the outcome of the Eurozone crisis and its impact on credit and borrowing.
“The current crisis is making consumers nervous, which will affect both the buy-to-let and wider mortgage market.”
He said that one recent trend of ‘double renting’ is set to continue.
Gonsalves said: “A recent phenomenon noted by Belvoir agents across the country is where home owners who are struggling to sell are now letting out their existing home to provide an ongoing income stream, and then moving to another lower-cost rental property.
“Double renting helps to avoid the stamp duty and legal costs that are associated with buying and selling, and enables home owners to remain ‘invested’ in the property market until the situation improves and they can sell at a profit.
“I believe that for reasons of flexibility, mobility and budget, 2012 will see a shift towards more people viewing renting as a preferred lifestyle choice rather than a necessity.
“By renting a property, people are able to plan their spending much more accurately and have the flexibility to follow job offers etc. These factors are becoming increasingly important, particularly in the current financial climate.”
He said that because of regional variations, it is important for property investors to take advice. He warned: “Buying in the wrong area could be very costly.”s
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