Residential rental market

Opportunities for new and existing investors in 2010

According to the Association of Residential Letting Agents (ARLA), 2010 will provide opportunities in the private rented sector (PRS), in particular as availability of lending begins to increase while house prices are still historically low, enabling timely investors to purchase properties for the buy-to-let market.

The residential rental market will continue to stabilise in 2010, with property oversupply decreasing due to reluctant landlords leaving the market. Evidence of increasing sales in certain areas seems to indicate this trend.

“As demand rises, in particular due to a lack of social housing, there will also be mounting pressure on the sector to provide good quality rental properties,” says the ARLA.

There has been little commitment from the government thus far on economic measures to help the wider industry meet property demand, but increasing demand should have a positive effect on the PRS, creating opportunities for new and existing investors and driving standards up.

ARLA also predicts that throughout 2010 standards will become an even greater issue, as homeowners and landlords alike are encouraged to make their homes energy efficient. Yet without incentives like tax relief, it will be difficult for an already struggling sector to make the necessary improvements.

The Pre-Budget Report was a missed opportunity for the government to show its commitment to the PRS – the boiler scrappage scheme, for example, should include rental properties and be part of Landlords Energy Saving Allowance (LESA),” says the ARLA.

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