News

Value of rented property rises 10.7 per cent

The average capital value of rented houses rose in double digit figures in the three months to February - good news for buy-to-let investors.

The latest figures from the Association of Residential Letting Agents (Arla) showed a 10.7 per cent climb in the average capital value of a rented property during the period.

This growth was particularly strong in central London, which saw rises in capital value of 12.4 per cent, while an increase of 15.5 per cent was seen in the rest of the south-east. However, average capital values in the rest of the country dropped by 0.6 per cent.

Rented flats saw a rise in value of six per cent during the three months, driven by increases in central London of 5.8 per cent and in the south-east of 11.3 per cent.

Rental demand was also found to outstrip supply, with tenants staying on in properties for an average of 15 months. Tenant demand saw its highest rise in nine years in the last quarter of 2006, according to a Royal Institution of Chartered Surveyors study.

Another area in which the capital diverged from the rest of the country was in properties being chosen by landlords. While in the rest of the country new build properties were the most popular, London landlords opted for properties more than 100 years old, Arla said.

Chief executive of Arla Adrian Turner commented: "London has a heavy weighting in its housing stock towards good quality Edwardian and Victorian property."

He added: "They are usually well built and spacious and make good rental propositions."

Arla offers deposits advice

In advance of new landlord deposit laws taking effect in April, the Association of Residential Letting Agents (Arla) is to offer advice.

A new leaflet has been produced by the association, which will help landlords understand their new legal obligations over deposits.

The laws relating to the Tenancy Deposit Scheme (TDS) will come into effect on April 6th 2007. Insured and custodial - the two types of scheme - are explained in the leaflet.

Arla chief executive Adrian Turner said: "Surveys show that most industry professionals understand tenancy deposit protection."

He added: "The problem facing the industry and letting agents in particular is how to ensure that landlord clients and their tenants as well understand that tenancy deposit protection is to be mandatory and that the well-tried TDS is the simplest route for landlords and agents to take to abide by the law."

Inventories will play a major role under the new legislation; landlords will be unlikely to be able to reimburse themselves for damages if they are not able to refer to their inventory.