8th March 2005

ARLA Members Survey Source & Tenure of Property in the Residential Rental Market 19K

Nearly 60% of all properties coming to the rental market are Buy to Let investments. However over a quarter of the supply still belongs to landlords letting their own homes, the traditional source of property for the market. Just over one in ten properties are put on the market by corporate landlords.

Regardless of the source of the property, the average length of the tenancies is 15 months and the majority of them are arranged as Assured Shorthold Tenancies, ASTs. It was the introduction of this type of tenancy that provided the impetus for the whole concept of Buy to Let. However, properties with rental values of more than £25,000 a year fall outside the scope of the Assured Shorthold. This boosts the number of non-AST tenancies to 11% of all tenancies arranged.

A sample of more than 500 member firms of the Association of Residential Letting Agents, ARLA, detailed the sources of rental property and the types and lengths of tenancies as a part of the programme of regular surveys of the Private Rented Sector and the Buy to Let market. These surveys, the largest and most frequent of their kind, are supported by the ARLA Panel of Mortgage Lenders, Birmingham Midshires, GMAC Residential Funding, NatWest Mortgage Services, Paragon Mortgages and The Mortgage Business.

According to the research released today, (Tuesday 8th March), Buy to Let investors are responsible for introducing 54.1% of the rental stock now coming to the market in Prime Central London. This figure rises to 59% throughout the rest of the country. Landlords renting their own homes account for 26.7% of the Prime Central London market. The proportion of these homeowner landlords rises to 28% in the rest of the south east and 25.7% elsewhere. Surprisingly, only about 1% of all properties introduced to the rental market is believed to have been inherited.

At 17% of all sources of housing stock for the rental market, corporate landlords are twice as active in Prime Central London. Elsewhere, they are responsible for an average of only 8.5% of the stock

Commented Adrian Turner, Chief Executive if ARLA, "Traditionally, a high proportion of homes to rent in the middle market have been supplied by landlords moving away from home, many to work overseas. Despite the different sources of rental stock from Buy to Let investors and the activities of corporate landlords, these homeowner-landlords are continuing to play a significant role in the success of the modern private rented sector."

The new ARLA research shows that, although the initial average length of a tenancy is nine months, tenants extend these tenancies to stay on for an average of fifteen months. More than three-quarters of all tenancies last for between 10 and 18 months

The average continuous stays were 16.7 months in Prime Central London, 15.1 months in the South East and 13.5 months in the rest of the UK.

The highest proportion of tenants, 44.2%, stayed in the same property for between 13 and 18 months. The longest stays were found in the South East, where nearly half, 48.6%, were for 13 to 18 months and 14% stayed on for between 19 and 24 months. The longest stays however are in Prime Central London. There, 44.8% of all tenants stayed in the same property for between 13 and 18 months. A further quarter stayed for between 19 and 24 months. Said Adrian Turner, "This totally confounds the perception that tenancies in the private rented sector are short term. The vast majority are arranged for at least a year and tenants very frequently extend their stay."

Full details of all ARLA and ARLA Buy to Let research and links to letting agents and mortgage lenders are available on www.arla.co.uk.

Ends

Note to Editors: This research into Sources of Property and Types of Tenure is drawn from data supplied for the quarterly ARLA survey of letting agents and investment landlords. This, and the ARLA Index of Rental Returns, will be published at the end of March.

ARLA Members Survey Source & Tenure of Property in the Residential Rental Market 19K

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