Keeping up with the changing private rental market

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22 Apr 2013

Keeping up with the changing market

Author: Peter Fuller

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Did you know, over the last ten years there has been a 61% increase of people living in private rental accommodation?*. Over this time there has been a steady and sustained demand from property investors and so far in 2013 this has increased to one in four sales in the UK being by investors*. However today's market is very different to that of 2008, making the shift from a buyers' market to a sellers' market.

So what's the reason for this change? With interest rates at an all-time low, first time buyers, builders and developers are back in the market, so competition is fierce.

This competition is set to continue as a mini-boom has been set in motion since The Chancellor, George Osbourne, revealed the new budget. It had plenty of positive news for existing property owners and landlords but it was also good news for aspiring home owners close to purchasing their first properties. Some key elements of the new schemes include; five-years of interest-free loans worth up to 20% of the value of new-build homes, the relaxation of some planning guidelines to stimulate house-building and buying and from next January, the Help to Buy Scheme will launch, providing £12?billion of guarantees intended to help 644,000 people over the next three years. We expect this to have a positive effect on property value in the future.

From the customers I've been speaking to, it seems many investors currently have money tied up in bonds which they are planning to cash in this April and plan on putting their funds into bricks and mortar. However, the low offers they've been making over the last five years won't go the distance in today's market.

I've noticed some investors have been searching for a property for a long time to try and find the right investment. For me, a good property is one that has at least three of the following features; a good location, above 5% yield, desirability for your target tenant, good income (compared with outgoings) and is easy to maintain. Properties which meet these criteria are rare, so if you find one, I'd advise not hesitating to make a realistic offer.

With almost every property indicates forecasting price rises of varying degrees over the next five years, my advice would be not to worry too much about the yield and instead focus on buying a good, 'let-able' property that will appeal to first time buyers and investors alike when the time comes to sell.

Our investor team can search the market to help you find a property that suits you. Call 01344 753 097 or visit

*statistics from 2013 ARLA conference

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