Is the Private Rental Sector set for more Turmoil this year?

02 January 2012 Categories: News

Is the Private Rental Sector set for more Turmoil this year?

At the end of 2011 some property experts in the City predicted a marked improvement for property sales during 2012. With homeowner mortgages becoming easier to secure and the average price of property set to drop a few per cent over the course of the year this prediction may well come true…but what will this mean for the private rental sector?

Looking at the prediction pessimistically it may well mean there are fewer tenants in need of private rental accommodation. If an individual is given the opportunity to buy a property for the same monthly outlay as renting they are surely going to buy. How many will leave the security of a tenancy agreement for the unpredictability of the mortgage market remains to be seen but the current high demand for rental properties is bound to be affected.

Or is it?

The other side of the argument says that an increase in the likelihood of selling a property will undoubtedly draw a high percentage of accidental landlords away from the private rental sector. A lot of accidental landlords only let their properties because they couldn’t sell but if the market improves they may very well put them back up for sale.

The result – tenancy agreements are bought to an end and tenants begin the search for another private rental property. It is probable that, should the prediction come true, more accidental landlords will leave the market than tenants, and so buy to let landlords shouldn’t see a great deal of difference in terms of demand than they saw this year.