The next 12 months could be a surprisingly good year for the private rental sector despite some obvious challenges, according to a leading agent.
David Alexander, head of Scottish-based DJ Alexander and the man behind lettings platform Apropos, says the rental market has already benefitted in recent months from tenants wanting to quit urban living and head to the country.
The result, he says, has been greater demand, higher rents, and popular areas showing signs of serious growth.
“Whether this growth in the private rented sector is sustainable in the long term is debatable. Although the Prime Minister has secured a Brexit deal it remains to be seen how this will impact on the many thousands of EU citizens who live in the UK, many of whom live in the private rented sector. Any sudden reduction in their numbers could see a sudden glut of properties resulting in reduced rentals in the short term” he warns.
But Alexander believes other factors are likely to fall in favour of the rental sector.
“This could be countered by a shortage of long-term properties if the holiday lettings market recovers. With predictions of an opening upof the UK market as early as February or March due to widespread vaccination there is likely to be an enormous increase in demand for staycation holidays this year.
“Many people may not be quite as keen on travel abroad if other countries’ vaccination programmes are less advanced than this country, so demand for UK-based holiday options are likely to be strong. If this is the case, then we could see a return of many properties to the short-term holiday lettings market to cash in on sudden demand.”
He continues: “There is much to be optimistic about in the coming year but there is also a balancing act to be struck by the Government to ensure that the gains the property market has made in recent months are not simply dissipated in a loss of momentum in the market and unfair and unprecedented property tax hikes in the Budget.
“Keeping things simple, ensuring property remains attractive and affordable to individuals, investors, landlords and tenants is the key to maintaining a stable and balanced economy ready for any uptick in activity which might occur in the coming 12 months.”
This post has originally been featured in Letting Agent Today.