Activity in the private rented sector to go down in 2012
31st January 2012 - There was an increase in buying and
selling activity in the private rented sector last year, but
research suggests this might not continue in 2012.
Research by landlords’ association ARLA has found that landlords
in the private rented sector (PRS) were very busy last year, with
buying and selling both up in the fourth quarter of 2011.
It was found that the number of landlords who sold a property in
the last 12 months increased from 6% to 8%, while the number of
landlords buying properties increased from 23% to 25%.
Landlords in the North West of England were particularly active,
with 31% purchasing at least one property last year and 11% selling
at least one.
“These statistics indicate that landlords changed their property
portfolios throughout last year, in some cases expanding portfolios
despite the gloomy economic climate,” said Ian Potter, ARLA
Operations Manager.
“However, our research also suggests that into 2012 this
situation might change, which could be a sign for concern.”
It was found that landlords are planning to be a little more
conservative during 2012, with the number saying they would acquire
extra properties dropping from 27% to 25%.
“PRS forecasts have stated that the rental sector will still
offer growth in the coming year – probably of four to five per
cent,” said Tim Hyatt, President of ARLA.
“This will come about in part because of the continued
inactivity in the sales market, but nothing like the growth we have
seen for the past two years. But the PRS still represents
substantial value for investors looking to enter the market or
increase their participation,” added Hyatt.
Additional research, carried out by the Young Group, found that
landlords in London remained positive about the year ahead.
It was found that 85.1% of landlords expect rents to continue to
rise in the capital throughout 2012, as demand in the PRS remains
high.
Landlords in the capital, and around the country, should take
out landlords insurance to ensure they
are protected in the event of property damage or rent arrears.
