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Rental stock up by another six per cent

A significant oversupply of rental properties in the marketplace continues to be the market headline, says Hamptons International. This trend continued in November, showing a further rental stock rise of 6% during the month.

Compared to this time last year Hamtons' UK rental stock levels are now 57% higher, which is great news for applicants as they have a wider selection of properties to choose from, but is not such good news for landlords.

London stock levels are 64% higher than November 2002 and country branches are up 43%.

However, despite lower numbers of tenants registering they are both active and committed, especially in London where viewings were up 18%.

With such an oversupplied market, tenants can afford to be choosy. Hamptons therefore continue to advise landlords that their properties must be presented in the best possible condition and stand out from the competition, in order to minimise the risk of void periods. Landlords are advised to use this quieter time of year to make home improvements.

Happy New Year?

More applicants are beginning to register, with a view to moving early in the New Year. Strongest demand is for studios, 1 and 2 bedrooms.

Hamptons are expecting a significant upturn in applicant levels early in the New Year; indeed registered demand for January already indicates stronger rental demand.

They anticipate that the studio, one and two bedroom markets will continue to let quickly and achieve asking (or close to asking) prices. Singles, couples and professional sharers continue to make up the largest proportion of registering applicants, ensuring market rent levels are met in these segments.

Family houses and larger homes continue to suffer the highest discount and longest void periods but, encouragingly, many of our branches have been reporting increases in families registering for the first quarter of 2004, so we expect this market to improve going forward.

Landlords should therefore expect more applicant activity over the next six months, although it is too early to predict any change in rental prices until stock reduces.

More substantial changes to the lettings market will be as a result of interest rate rises which will reduce demand in the sales market and correspondingly increase rental demand.

Hamptons say they are yet to experience investors selling off investment rental properties; the worst of the low yields is over and their advice to those who have persevered is to expect a better 2004.