Demand for buy to let homes will continue to drive the rental market in the coming year as accidental landlords sell up, says a leading letting agent.
Belvoir Letting, a franchise firm with offices across the country, claims accidental landlords will take the chance to sell their homes as prices rise and mortgage restrictions ease with the help of government backing.
This will reduce the stock of buy to let homes unless other investors step in, keeping supply and rents steady.
“Belvoir predicts the number of people choosing to rent will continue to drive up demand,” ’ said Dorian Gonsalves, chief executive of Belvoir Lettings.
“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 mortgage lending and with this we expect to see the emergence of more investment minded landlords looking to capitalise on this trend,
“We now 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.”
He added that new investors should provide a further buy to let boost, but warned that rents have not kept pace with inflation.
“While 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,” he added.
He also said that although increasing property prices will be good news for landlords, for those new to buy to let investment, or looking to expand their current portfolio, finding a good deal in many areas could become tough.
The firm is predicting modest rent increases in 2014 as the needs of tenants will continue to push up demand for quality accommodation.