Property Investors Warned About Expanding Portfolios Too Quickly

11 July 2012 Categories: News

Property Investors Warned About Expanding Portfolios Too Quickly

The last 18 months has seen a steady increase in the average property rental price in the private rental sector, and as a result thousands of landlords have taken advantage by investing in additional properties. But according to Mortgages for Businesses’ Steve Olejnik further new purchases should be researched thoroughly as annual rental increases are definitely slowing down.

Admittedly the latest figures from LSL Property Services show the average monthly increase for May as 0.4% but year on year the average rent has decreased in many regions. The worst hit regions are Wales with a year on year fall of 0.7% and the East Midlands with an average decrease of 1.5%. Even central London has seen a 0.5% decrease since this time last year.

When asked to comment on the prospects of those aiming to invest further this year Mr Olejnik said, “Investors shouldn’t necessarily avoid making new purchases in areas where rents are falling, but they need to do their homework. Research is incredibly important and, if carried out thoroughly, it will help investors make better, well-informed investment decisions.”

Similarly David Newnes of LSL Property Services said, “Rents may no longer be rocketing in all areas, but these regions can still provide good opportunities for sensible investment.

“Landlords who research tenant demand in their chosen area – and for particular types of accommodation – will limit the time that their prospective rental properties are vacant, not to mention boost rental income in the long run.”