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Is the rental sector really moving twice as fast as the market?

Posted on Posted in Up and coming areas

The Rightmove report suggests that the rental sector seems to be moving nearly twice as fast as the market as a whole at 9.6% vs. 5.6%. This obviously illustrates the large demand for rental properties. Though, it is hard to say if this is due to first-time buyers or due to Buy-to-Let landlords as it is often the properties that rent best that are also the target of many first-time buyers. It is often argued that the burgeoning buy-to-let market is taking away the first rung of the ladder for those first-time buyers. Landlords much prefer smaller, cheaper properties as they generate much better yields than larger properties. One or two bedroom properties will typically let at 5-6% depending on where they are in the country. Expensive areas of central London like Chelsea and Knightsbridge now yield on 2% while areas of the north of England can yield up to 9%. Rental yield is just one of the things that comes into the equation for landlords. Achieving capital growth by choosing properties in the right area is also very important.

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