Landlords in the UK are now seeing their stock become more valuable, thanks to rising rents across the past 12 months. According to new figures, both new tenancies and renewal prices have seen higher prices for tenants than at the same time last year.
In the study, carried out by Countrywide Residential Lettings, it was found that the average new rental property price is now 4.7 per cent higher than it was at this time last year, with the consistently high level of new demand from tenants allowing landlords to improve their levels of yield.
In addition to this, it was also found that renewals have seen more tenants paying more for their rental in the last year. Of those who have signed a new contract in the past 12 months, the average increase they have faced is some 1.8 per cent.
The fact that rental properties with a tenants are also seeing their prices increase has also meant a change in strategy for landlords over the course of the past year. Many are now feeling confident to buy stock that already has a tenant in situ. In fact, 11 per cent of the rental properties bought in the last year have come with a tenant already in place.
This represents a fourfold increase from 2008, when the strategy was broadly to buy stock empty before finding a new tenant.
"It seems that the secondary market of landlords selling investment properties to other landlords is growing. Landlords are increasingly recognising the long term value attached to keeping a reliable, high quality tenant," said David Fell, research analyst, Countrywide plc.
"Properties sold with a tenant in situ, which offer a ready-made guaranteed income, can even trade at a premium," he continued.