Its disappointing that genuinely hard working people are finding it difficult to secure the finance to fund their first house purchase (if thats what they want to do of course). These people still need somewhere to live though and coupled with the long term shortage of residential property in the south east of England its no surprise that rental demand has increased. 

Im also not really surprised to see the amount of money currently being invested in the buy to let sector and I dont say that just on the back of low interest rates and rising rental income. It occurs to me that buy to let is a fairly staightforward investment (depending on how you finance it!) compared to say investing in a pension fund over the last decade. These pension funds were supposed to be a very safe place to put your money for retirement but have turned out not to be for a number of reasons but mainly i think to do with the compromised ratings agencies and their relationship with the big investment banks and their increasingly complex financial products. If you want to know more about that then go here.

Anyway, heres the article:

Demand for rental properties will remain strong and continue well into 2012 says Landlord Assist, the nationwide tenant eviction and referencing firm.

Since the start of the recession the buy-to-let sector has witnessed a surge in demand as many would-be buyers have struggled to get on the property ladder due to the strict lending criteria imposed by lenders and the challenge of raising large deposits.

This unprecedented demand has pushed up the price of the average rent in the UK and enabled landlords to increase their rental prices to record levels.

Graham Kinnear, Managing Director at Landlord Assist believes the buy-to-let market will remain strong for the foreseeable future for landlords as the fragile economy is continuing to put off many would-be buyers from making such a huge commitment as purchasing a property.

He says: “Demand for rented properties is showing no signs of slowing down. The slow growth in the UK economic recovery has meant people are still wary about committing to something as huge as a mortgage and are turning to rented accommodation instead.

“At the same time rising unemployment levels, which have reached a 17 year high, have left many people worried about losing their job and with the cost of living also rising this is putting off would-be buyers from thinking about buying a house.

“Higher living costs are also hindering the efforts of many tenants to save for mortgage deposits whilst they are renting so many are extending their tenancy agreements for longer than they initially envisaged. This makes it a win-win situation for landlords.”

But it’s not all good news for landlords. Despite the buoyant market conditions, rising rent prices have led to an increase in rent arrears and landlords need to be aware of the growing possibility of tenants defaulting on payments.

Stephen Parry, Commercial Director at Landlord Assist says: “Unemployment is one of the main reasons why tenants default on their rental payments and unfortunately this can have a direct impact on a landlords ability to meet their own financial obligations. We strongly urge landlords to take immediate action in situations of rent arrears and consider taking out a rent guarantee policy to protect their interests.”