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Rental market begins to bottom out

Wednesday, 25 March 2009 9:58 AM

The rental market has begun to show signs of recovery over the past three months, according to the findaproperty rental index released today.

The research shows the trend of falling asking prices and rising stock has slowed in the last quarter, with rental prices falling just -0.4 per cent in March, the lowest fall for six months.

Supply also slowed, with stock rising 1.9 per cent, the lowest monthly increase since September 2008, and well below the 12 per cent high seen in other months.

Average rents for March were £827 pcm, compared with £830 pcm in February, with tenant activity reducing the average time a property is on the market by five days over the month.

Andrew Smith, head of research, said: "The UK rental market over the past year has been a story of rising supply levels outstripping tenant demand, which in turn has led to falling rental asking prices. There now seems to be some evidence that this downward spiral is slowing and as such we may be reaching the bottom of the market.

"Economic instability and low consumer confidence mean that it is impossible to predict what will happen to the rental market over the coming months; however, we believe that there are signs that we may start to see supply levels tighten and rents begin to rise towards the end of 2009."

The regional UK rental market remained relatively stable during March 2009, according to the research, with eight regions recording modest falls in asking rents, two regions recording modest rises and one showing no change.

A spokesperson for the National Landlords Association (NLA), said: "Once more here we have further data which indicates a mixed bag across the country: rental markets vary significantly within individual towns and cities.

"This will come as no surprise to professional landlords with an eye on the long term; they know how to survive in a downturn. The phrase 'green shoots' seems to be appropriate in this case."

Sarah Garrod

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