The findings from the National Landlords Association’s (NLA) latest quarterly Landlord Panel show that 54% of tenancies now last between two and three years, while just shy of a third of tenancies last more than four years. The average void period between tenants was found to be 69 days. Long-term tenancies look set to become ever-increasing, as the Joseph Rowntree Foundation predicts that an additional 1.5m 18 to 30 year olds are likely to be priced out of the sales market in the next eight years.
Dorian Gonsalves, chief executive of national lettings chain Belvoir, said, “A depressed residential property sales market, lack of mortgage facilities for first-time buyers and an inability to save for high deposits are all factors that are forcing a generation of Brits on to the long term rental market.
“We have 150 offices nationwide and many of our offices are already reporting a trend for tenants to remain in rental properties for much longer than was previously seen.
“As a result of this, new tenants in some parts of the country are struggling to find good-quality accommodation.
Long-term tenants are good news for landlords, who do not have to incur costs to re-let a property, and if the tenant is a good one, who pays their rent on time and looks after a property really well because they view it as a family home rather than transient accommodation, they are very valuable to the landlord.
“Long-term renting is now being recognised as a viable alternative to home ownership, which was probably not the case for previous generations in the UK, although was certainly the case throughout Europe.”
But despite this stability, it was found that nearly half (49%) of the landlords surveyed had experienced rental arrears in the last year. 37% of landlords are concerned that there may be instances of arrears in the coming months.
The proportion of landlords who have invested in additional properties to add to their portfolio has gone up by 2% this quarter, from 10%. 22% expect to have purchased additional property within the next 12 months.
It seems, however, that despite the growing demand in rental property, many landlords are struggling to get the financing they need to invest. In the last three months, a nearly a third of landlords were unable to expand due to difficulties in accessing finance.
David Salusbury, Chairman of the NLA, said,
“Longer tenancies and a lower turnover rate are both signs of much-needed stability for both landlords and tenants in tough economic conditions.
“Private landlords are a key part of the investment mix required to meet the rising need for more flexible forms of housing at a time when demand for rented accommodation far outstrips supply.
“We recognise that the private-rented sector is evolving and it now accounts for 17 percent of the UK’s housing stock. That’s why this year’s NLA National Conference seeks to educate landlords about their responsibilities, while focusing on the challenge of housing the changing needs of the population.”
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