Comment: Four reasons for cheer for landlords

Just three months ago we published a landlords’ ‘survival guide'. Rental arrears were rising, as were repossessions.

What a difference a British summer makes. Landlords have now been told they have four reasons for cheer. According to LSL Property Services, the lettings agent network which researches the market, the quadruplet of bright spots are: July’s rising rents, rising prices, falling tenant arrears and lower void periods.

I was intrigued by this particularly cheery press release which landed in my inbox sandwiched between missives about the rising petrol price and ‘socially useless’ banks.

1. Rising rents

They are up 0.5% in July compared to June.

Like the survey’s compilers acknowledge, returns vary widely around the country. Of the ten regions that the data was divided between, only four saw rental increases; London, Yorkshire and The Humber, North West and South East. And of course the annual change remains negative.

‘Tenants are still getting a good deal’, said LSL. Rents are 4.5% below their peak last August. The Nationwide reported a 6.2% annual change in house prices in July. So how is this a good deal for tenants? Shouldn’t they be getting greater price cuts?

2. Rising prices

Are house prices going to continue rising?  Home owners are holding out and a lack of properties is therefore being brought onto the market. Plus obviously record low interest rates are supporting prices. Once home owners are satisfied prices have risen a fair whack, that latent supply will pour onto the market.

As Nationwide’s Martin Gahbauer said yesterday, ‘the eventual exit from exceptionally loose monetary policy could make the recovery in the housing market bumpier than some might expect after the last few months of price increases.’