Top agency insists rental sector negativity is exaggerated

Leaders Romans Group claims the pessimistic mood which many say surrounds the private rental sector is exaggerated.

It has surveyed its landlord clients - who represent only 380 properties - and says 75 per cent identify 'A shortage of rental properties in my area' as a prime opportunity, marking a substantial increase from 29 per cent when last canvassed in February. 

Similarly, 62 per cent recognise 'Increased rental yields' as a real prospect, a rise from 44 per cent in the previous survey.

LRG says this is backed up by recent market analysis which shows the number of new prospective tenants registered increased from 2022 figures. 

August 2023 had an average of 197 prospective tenants registering compared to 149 in July 2022. Figures in August 2023 were up almost 32 per cent year on year which indicates robust demand for rental properties, enabling landlords to capitalise on higher rental yields.

Furthermore, it says landlords are optimistic about the continued steady rise in house prices: 40 per cent anticipate 'House price increases from 2024 onwards' - a notable increase from 17 per cent in the Q1 survey. 

While acknowledging the challenges posed by various factors - including the Renters Reform Bill and mortgage rates - LRG, which represents over 42,000 landlords, says it “remains steadfast in its belief that several essential components for a positive market remain intact.” 

The agency anticipates that interest rates will decrease in the lead-up to the 2024 general election and has doubts about the progression of the Renters Reform Bill.

Allison Thompson, LRG’s national lettings managing director, says: “Demand for rental properties has seen a 32 per cent increase since last year, with rental prices continuing to rise. This shows the return on investment for landlords remains positive. Those landlords we have recently surveyed remain optimistic about the opportunities available in the coming year. LRG's resounding message to landlords is to remain committed on the basis that property investment is a reliable and lucrative long-term option.

“Furthermore, due to high levels of demand for rental properties and a slow-down in property sales, we’re increasingly providing lettings advice to homeowners who need to move but are struggling to sell or don’t want to reduce their house price. Across the country, across different property types and locations many people in this position are taking advantage of unparalleled demand in the lettings sector.”

LRG says its research indicates that the majority of landlords are committed to their property portfolios. Some 68 per cent intend to maintain their existing holdings, while six per cent plan to expand their investments.