Private rental sector set to rise over the next year

The private rental sector is set to grow this year as an increasing number of people are priced out of the mortgage market.

New findings have revealed that the private rental sector could make up 20 per cent of the homes market by 2021.

In fact, according to Belvoir Lettings, the number of people choosing to rent will continue to drive up demand.

The last year has also seen the rise of the 'accidental landlord' because of the inability of some mortgage holders to sell their house, although a small proportion of these are expected to take advantage of rising prices in order to make modest gains and exit the market.

In addition, the report concluded that over the next few years, new rented housing stock will come from different directions, including from institutional investors.

Commenting on the data, Dorian Gonsalves, chief executive of Belvoir, said: "There are real indications of a recovery in the housing market with property prices predicted to rise, along with a projected 25 per cent increase in buy to let mortgage lending and with this we expect to see the re-emergence of more and more investment-minded landlords looking to capitalise on this trend."

He added that renting offers very good value, because of the flexibility and the fact that it is cheaper than taking out a mortgage.

This is particularly the case in London and the south-east, where property values tend to be much higher than those in the northern regions.

Mr Gonsalves added: "Whilst landlords always need to ensure they invest in the right property and be aware of local market rents, they must also remember that a good tenant who looks after a property well will actually be worth more to them, by taking out longer tenancies and reducing potential void periods. It's a win, win situation."

Recently figures published by Nationwide showed that property prices rose by 1.4 per cent in December and were 8.4 per cent higher than a year before.

Published 14th January, 2014

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