Flood in letting sector is threatening collapse of rents

Posted under General by Jermaine

Estate agents are worried over the impending collapse in rents as large number of landlords is flooding the rental market.

According to Andrew Moody, struggling sellers are putting properties up to let leading to downward pressure on highly strained sector.

Landlords who are not finding buyers for their properties due to the collapse of residential sales are entering the letting market offering high specification properties to tenants which are normally offered at bargain prices.

The number of available rental properties has gone up by 60% over the last year to 284,000 from 171,000. Estate agents are worried that this sudden increase in number of ‘reluctant landlords’ who are offering their properties for letting could destabilise entire rental market.

According to a leading letting-agency, the Association of Residential Letting Agents, there is already 8.1% fall in rents in central London over last quarter and 2.5% across the UK as a whole.

Ian Potter, head of Arla, says that there is over supply of every type of property in the market, particularly in prime central London.

According to the head of residential property estate agents at Humberts, David Adams, emergence of new landlords has created many difficulties for established landlords. He informs that high-spec properties are now being let by new landlords, making traditional rental properties less attractive and more difficult to rent.