The National Association of Estate Agents has launched its new quarterly lettings survey, revealing that the rental market in the third quarter of 2006 was buoyant and strong.
The increase in property prices that consistently acts as a barrier to first time buyers, matched with the influx of Eastern European immigrants is continuing to fuel this sector of the property market.
The time taken to let a property steadily declined over the last quarter, with the average for the quarter at 12.2 days. The third quarter is traditionally the busiest time for lettings agents with many people aiming to occupy new homes before the start of the school year, and many students returning to their studies.
Further evidence of an expanding buy-to-let market is the number of reported empty dwellings in the Q3 2006, compared with the same quarter last year. The average number of vacant properties reported per agent in Q3 2006 was 14, compared with 6 empty properties per agent in Q3 2005.
The first-time buyer segment of the market accounted for just 11.9% for the third quarter. Industry professionals would hope to see this at a much higher level of 25%. The rental market is benefiting from the many affordability barriers effecting potential first time buyers, as buy to let investors compete for the traditional first time buyer properties.
Agents reported that rents increased by an average of 1.45% per month in the third quarter. This is a dramatic increase of pace in comparison to the same period last year where a 0.87% increase was reported. An increase in demand for rental property plus rising house prices and the introduction of HMO licensing have all contributed to the hike in rental prices.
Jan Bartlett, lettings expert at the NAEA, says: “The lettings market has seen many significant changes in the last twelve months. The introduction of licensing of houses of multiple occupation, tenancy deposit schemes and the housing health and safety rating system, have and will have significant impacts upon the market.
“On the whole the sector is performing well with many agents reporting significant improvements in business. The mass influx of Eastern European immigrants has boosted the market and of course, the ever increasing average age of the first time buyer has assisted in an increase of buy to let investments.”