Are Rents Still on the Rise or Not? The Confusion Unravelled!

Depending on which newspaper you read or which website you follow you will have probably read that rental yields are either going up or going down. RICS, the ARLA and paragon mortgages have all put out reports in the last few months, that at some points, on the surface seem to contradict what each other has said in someway; however, when you dig deeper and get behind the facts, there is not always as much conflict as there first appears.

The Current State of Play

1. Many landlords and would be owner occupiers alike are veering away from purchasing property at the moment since they are worried about the instability in the current market.

2. Home owners are having difficulty selling their properties at the moment, so many are taking the decision to still move and rent out their current property.

3. Property developers and flippers are having difficulty getting good prices for their properties so they to are having to rent them out.

4. Many owner occupiers who have to sell at the moment are choosing to rent another property rather than plough their money back into another property that might soon be in negative equity.

Some of these scenarios are causing the market to be flooded with more properties to let that there would have been previously; because of this, in general, tenants have more choice and this is why in some areas rental prices are stalling or even going backwards as tenants relish their new found power to negotiate a cheaper rental price.

In this scenario bulk build flats are inevitably the first and the hardest hit. Highly sort after but low supply properties are still bucking the trend and seem destined to continue to do so.