Good news was released to day in the U.K., with new figures revealing a continued rise in the private residential letting yields. Demand in the private letting sector continues to push up rental values during the last 3 months.
In the first quarter of the year, rents were up 6.2%, and in the last 3 months, rental values have risen 6.4% - ending a period of lengthy stagnation in the U.K. rental market. The recent figures also revealed that confidence is returning to the market, with many predicting rental demand will continue to rise over the coming months, with others predicting a stabilisation.
A lack of finance in the property market is bolstering rental values, as potential first time buyers are still out of the market, and are forced to rent. Students, immigrants and young professionals are keeping the demand very much alive.
As long as the rental yields continue to florish, buy-to-let investors will continue to buy into the market, as long as interest rates remain low. Sentiments in the U.K., are generally that the market has bottomed out, and from here on in the market will begin it’s slow and steady recovery. Price decreases have slowed down in the last few months, with many predicting that the market will continue it’s recovery over 2009, and into 2010. There remain doubts as to how soon prices shall reach the unprecedented levels seen in the peak of 2007. There will inevitably be a huge upturn in sales when pent-up demand in the U.K. is given the finance again to start borrowing.
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