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The monthly magazine providing news analysis and professional research for the discerning private investor/landlord

2012 Could Prove to be a Challenging Year for the Private Rented Sector

The supply and demand for residential rental property over the over the last 5 years has been somewhat of a rollercoaster, with a mass influx of accidental landlords hitting the market in late 2007/8 when the property market crashed, followed by a reduction in housing stock hitting the rental market due to lack of mortgage funding availability shortly afterwards, which we are still suffering from today. It is hoped that the new measures being proposed by the Governments Housing strategy will start to help ease the situation with regards to supply and demand.

Although there is a shortage in rental supply from an agents perspective this is counteracted by the fact that so many agencies have closed, which means although there is less supply, there are less agents to share the market, as well as there being an unprecedented amount of tenants looking for accommodation. This means that in many regions, any decent property available is being snapped up, quickly and easily. There is however some anecdotal evidence that the supply is increasing in some areas throughout the country as the mortgage market eases and investors become more confident of prospects in the current market.

With unemployment being shown by the governments latest figures to have reached the highest levels in 15 years, it is fair to assume that this will lead to much higher arrears problems in 2012 than many landlords will have experienced so insurance products with a rental guarantee are likely to become more in demand this year, and it will be more important than ever to have strict rent arrears collection policies to ensure that you get paid first.

Repossession is also likely to become more prevalent this year as more tenants and landlords are unable to pay their mortgages and rent and they will end up losing their properties.

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