Rental prices increase in September/October 2011

November 12, 2011

Landlord Information

Recent news reports from the BBC* show that the latest surveys indicate significant increases in average rental rates across much of the UK as the year moves into autumn.

 

This is extremely good news for many landlords although, predictably, it is also giving rise to further debate about the affordability of social housing in certain parts of the country.

 

Some people are predicting that this situation is likely to continue for the foreseeable future and perhaps culminate in and around the London 2012 Olympics.  After that the position, with respect to rental rates, seems less certain.

 

Perhaps more worryingly is that hidden away in the survey relating to rental rates, is a slightly less pleasing statistic that rent arrears and defaults also appear to be on the increase.

 

There may be many reasons for this and some may rather simplistically point towards the increase in average rental rates being linked directly to the increase in arrears and unpaid rent.

 

Of course, statistics may be deeply misleading and subject to widely differing interpretations – some prefer to point the finger at the general state of the economy rather than the fact that rental prices have increased.

 

Typically, landlords buildings insurance cover alone will not make a contribution towards what is sometimes called the fleeing tenant problem.  Nor will such let property insurance typically help with legal fees if you are in dispute with your tenants over unpaid rent or eviction proceedings etc – though there may be some insurance solutions available as add-ons, depending on your let property insurance provider..

 

If you have full let property insurance, your policy may help with a loss of rental income in situations where there that has arisen due to an insured risk – that may include, for example, situations where you have been forced to ask your tenants to leave while you undertook repairs on a problem that arose from an insured issue.

 

Some policies may offer cover in situations including malicious damage or theft by tenants or if you are unfortunate enough to be sued by them under the provisions of third party liability cover.

 

For the most part, however, landlords may need to simply fall back upon their own tried and trusted techniques for trying to assess the responsibility of potential tenants prior to confirming the rental agreement.

 

It is also interesting to note that the report appears to indicate that some potential buyers continue to hold off purchasing as they are by no means certain that property prices have yet stabilised or reached the bottom.

 

This may be having an effect on the continuing rather shaky and uncertain position of the property marketplace.  So while on the one hand, such people are helping to push up rental prices which is good for some landlords, on the downside it continues to keep the value of their assets down at lower levels than they would ideally wish.

 

*Source:

http://www.bbc.co.uk/news/business-14934316

 

 

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