The UK’s rental market is going strong with the buy-to-let sector continuing to thrive according to figures from the National Association of Estate Agents (NAEA) which show that from October to December 2006, rents continued to rise at an average of 1.5% each month. This is almost double the rate of rental growth recorded for the same time last year of 0.72% over the same period.

The research also shows there has been an extra demand for rental property due to increased immigration, particularly from Eastern Europe.

Additionally, the market has also benefited from potential first-time buyers staying in rented accommodation for longer periods as their typical buying age rises.

Jan Bartlett, lettings expert at the NAEA said “The market is looking particularly healthy, aided by rising property prices and increased immigration in 2006. Interest rate rises are a concern as many landlords may choose to sell and cash in on their investment with the threat of increasing expenses.”
Although significant return can still be gained from buy-to-let property, it will be interesting to see how the new Tenancy Deposit Protection Scheme affects the confidence of investors.