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More to look to rental market in 2012

More to look to rental market in 2012

Category: Mortgages

Updated: 10/01/2012
First Published: 10/01/2012

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The seemingly unstoppable ascent of people looking to the rental market shows no sign of easing, with landlords set to enjoy another fruitful year.

In fact, more than half (56%) of landlords expect demand for rented accommodation to either 'grow' or even 'boom' in 2012.

Indeed, only 6% of landlords can foresee a year where tenant demand falls.

Nervous providers, high deposits and an uncertain jobs market have pushed many people into the rental sector in recent times, with numbers exploding over the last five years.

And with little to suggest anything but a continuation on that theme, almost half (45%) of landlords think they will increase their earnings from their buy-to-let portfolios this year, with only 2% predicting a decrease.

The findings from Paragon Group may come as a worry to some tenants who are already struggling to make ends meet.

Just a small increase in rental prices, combined with a cut in housing benefit could force many tenants to look elsewhere.

But landlords don't think 2012 will bring any notable increase in people struggling to pay their rent.

Over the coming year, two thirds of landlords said that they thought arrears levels would stay stable and 20% said that they thought arrears would rise moderately.

"It is no surprise that landlords are expecting a healthy level of tenant demand in the New Year, based on the levels of demand we have seen steadily increase throughout the past 12 months," said Nigel Terrington, chief executive of Paragon Group.

"2011 was certainly a good year for the buy-to-let market, with not only increasing tenant demand but landlords investing in their portfolios, low levels of arrears and more available finance.

"With the success of 2011 to build on, I believe the private rented sector will continue to perform and provide a valuable tenure choice for even more people in 2012."

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