4 March 2011

Shortage of rental property

There is a growing concern over the number of rental properties available and that a considerable under-supply could lead to problems.

Nigel Terrington, Chief Executive of Paragon Group has attributed this to the phenomenal demand. He said that there is anecdotal evidence of sealed bids being used to guarantee properties, and that "this will become more commonplace across the UK unless the private rented sector is able to expand to meet higher levels of demand."

He concluded by stating that if tenant demand continues on its current level or rises further, there will be “major implications” if that demand cannot be met.

This statement was in response to Paragon’s Private Rented Sector Trends report, which said tenant demand had hit a two-year high in the last quarter of 2010.

A higher number of landlords thought that tenant demand had grown compared to the third quarter. The number of landlords reporting a rise in tenant demand has risen month on month for the last six months. Only 4% of landlords thought tenant demand had fallen.

So with demand increasing, we need more landlords to meet the supply.
With the market as it is, adding more properties to your portfolio may be a highly lucrative move. The average void period at the moment is only 2.9 weeks for the year so rental income is consistent. The demand for rental property is evident with tenants clamouring for places to live.

If you research your investment carefully and choose the right location, it could be a very good time to invest.

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