UK Buy to Let Sector Sees Growth of Confidence

For the first time in 18 months, Association of Residential Letting Agents reported a 2% increase in the number of its members (from 6.5% to 8.5%) who think that achievable levels of rent rose.
The findings of Association of Residential Letting Agents’ survey, which examined the situation on the buy to let market in the third quarter of 2009, revealed that average returns on residential property rents reached 5.1% on both, houses and apartments (the figure for houses is the same as 3 months ago, while it is 0.1% higher for flats).
It is also worth noting that the asset value of buy to let houses in London and the South East grew by 9.3% in the past three months. The figure is comprised of a 10.6% rise in asset values in Prime Central London and a 13.6% rise in the South East. The capital asset value of houses in other parts of Great Britain fell by 1.5%, however.
As for the value of residential rental flats, it rose by 9.7% over the same time period. Value of flats increased by 12.7% in Prime Central London and by 13.7% in the South East, however, it fell by 4.3% in other regions of the United Kingdom.
The survey also showed a significant shift in supply and demand balance. In the past three months, the number of tenants increased, while the number of properties available for rent fell, which resulted in significantly reduced void periods.
Survey findings suggest that an average void period now constitutes 28 days rather than 30 three months ago. The figure represents the first fall in the length of void periods in the past year. The average number of new tenancies arranged by Association of Residential Letting Agents members also increased from 33 to 36 in the past quarter.