Rental Overheating Spreading Beyond the Capital

Monday, August 08, 2011

Our research has shown that the renascent boom in buy-to-let is reaching other parts of the UK

According to our latest survey of UK landlords, conducted by us and the Residential Landlords Association, (RLA), the regions with the highest number of landlords buying property in the last 12 months were the North East (30%), the Midlands (26%) and the Rest of London (26%)*.

Ian Potter, operations manager at ARLA, said: "Traditionally London has led the way with Buy-to-Let, but we are seeing signs that investors elsewhere in the country believe now is the time to buy - if you can arrange finance, it could be prudent to take advantage of lower property prices."

While landlords in Central London and the Rest of London were most likely to buy further properties to let in the next 12 months (33% and 30% respectively), 30% of landlords in the Midlands also said they would be likely to buy in the next year.

In contrast, only 18% of landlords in the South West bought rental properties in the last year, while some 10% sold - the highest number in the UK.

The research showed that landlords in the North also have bigger property portfolios, with an average 13 properties per landlord in the North East and North West. In comparison, landlords in Central London and the South East own an average 6 rental properties each.

"Some towns across the UK are suitable for rental investment as they have a high number of students, while others - such as the recently unveiled Local Enterprise Zones - are areas being targeted for future growth," explained Mr Potter. 

"While it is a positive sign that landlords are continuing to purchase rental properties, this individual activity needs to be boosted by larger-scale investment. With demand still far outstripping supply, and home-ownership out of reach for many, it is critical that more people have access to a home of their choice.

"As the rental sector remains unregulated we would urge anyone considering becoming a landlord, or thinking of renting a property, to engage with a letting agent that is a member of an accredited body before making a commitment. ARLA members, for example, have industry-leading market knowledge, follow a strict code of conduct and are licensed, with access to client money protection and a redress scheme."

The ARLA Review and Index is available at: http://www.arla.co.uk/buy-to-let/buy-to-let-review/2011/q2/

*'Rest of London' denotes area within the M25, but not including Central London

Editor Notes:

About ARLA's research

The ARLA Survey of Residential Investment Landlords, June 2011, was conducted among 1,519 landlords. Together with the ARLA Members' Survey of the Private Rented Sector, covering Q2 2011 and drawn from 479 member offices, the research forms the ARLA Review and Index. All surveys and statistics can be downloaded from http://www.arla.co.uk/buy-to-let/buy-to-let-review/2011/