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Rising rents 'to result in tenants moving into second choice areas'

09th May 2012

The growing demand for rental accommodation at present will result in tenants increasingly moving into less popular areas, it has been claimed.

If this happens, it could increase the investment opportunities for landlords, with the current rising rent levels spreading out into a wider range of locations.

According to James Davis, chief executive officer at Upad, "huge limitations on stock" means rental values will continue to increase across the UK.

"There are more landlords coming into the space at the moment and there are an increasing quantity of tenants who don't have the deposits to purchase a property or just can't get a mortgage, which will put even more pressure on the rental sector," he said.

As a result, tenants will be forced to rent properties in less expensive areas, predicts the expert.

"Rather than this resulting in rents evening out, I think that what will happen is that tenants will have to move to the second or third best area rather than where they would actually like to live."

Mr Davis's comments could tempt an increasing number of landlords to invest in new properties, perhaps in areas they previously hadn't considered as being popular with tenants.

But wherever landlords choose to buy property, they should make sure their investment is properly protected by taking out comprehensive landlord buildings insurance and contents cover.

Meanwhile, according to the latest rental index from findaproperty.com, the average asking price for renting in the UK is now £868 per month - one per cent up on the same time last year.

The property website reported that households are spending an average 38 per cent of their take-home income on rent, with those in London spending 71 per cent.

Commenting on the figures, Mr Davis said: "I don't see a reason why the situation will change. I strongly believe that rental values will continue to increase in the UK."

Posted by Jason Randall

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