Lettings: tenants

The lettings market is proving to be resistant to the downturn with demand from tenants for quality properties still strong as many prefer to rent in the current market rather than commit to buying. Tenants are becoming more discerning however, demanding more for their money today than in previous years.

‘From a lettings point of view, the increase in demand we are starting to see should bring with it stable rents,’ explains Will Gentle, manager of the lettings department at Burns Lettings, Bournemouth. ‘Although we saw rents fall slightly last year, we’re already seeing prime locations picking up and benefitting from better rents.’

Buy to let: landlords

For investors, however, the Buy-To-Let market has still not recovered as lenders are still nervous about lending to investors without them putting down much larger deposits.

With house repossessions at their highest for 14 years (46,000 homes were repossessed in 2009, according to the Council of Mortgage Lenders), there’s a shortage of funds for landlords, even for sound ones keen to grow their property portfolios.

This means that the first time buyer market of smaller, affordable studio and one-bedroom properties is short on purchasers. So Will suggests that for those well positioned to place those deposits this is a good time to buy. ‘There are opportunities out there for investment with good rates of return,’ he comments.

He is also urging landlords to be more open-minded about the financial position of some tenants. ‘Unemployment remains a challenge and some tenants may well not have a spotless credit history. This doesn’t mean that they’re necessarily higher risk, but it’s worth putting extra safeguarding measures into place for some extra peace of mind. We’ve just introduced Rent Guarantee as an option for all our landlords which would remove much of the risk.’

Overall Will is confident that the outlook for 2010 is a good one.

'We will continue to see a positive rental market but only for those properties that are of a good standard. Poorly presented properties with shabby furniture or decoration will struggle to find tenants.’

Lettings market: agents

Will continues, ‘We may however see more agents, ones who started to dabble in the lettings market when the sales market first turned, giving up and returning to sales or folding – so I would urge landlords to choose a reputable, established agent.

‘As long as lenders make it difficult for first time buyers to get their first foot on the ladder, we will almost certainly continue to see more sharers, especially those who are renting for the first time, in order to spread the costs.’

The right property will attract the right tenant and property, if landlords and prospective landlords take advice, continues to be a strong investment in the current market.