I have talked a lot about location being a prime factor in whether or not your local buy to let market is starting to show the very early signs of recovery. There is no doubt that this is important, but figures released this week by Findaproperty.com indicate that the type of property you own may be just as important.
According to their figures, the number of houses available to rent in the market fell in April for the second month in a row, in contrast the number of flats rose for the sixth consecutive month.
Clearly supply and demand dictates that these figures have an effect on rent rates and predictably, according to Findaproperty.com, rents for larger properties are up two months running while flats show a further 0.7% fall in average rents.
Andrew Smith, head of research at FindaProperty.com, said: “The UK has become a tale of two very different markets. House rentals are seeing the start of a recovery with declining supply rates and price rises for the largest family homes. In contrast, the flats market has seen a much deeper downturn, with rental prices falling for 13 consecutive months and supply levels continuing to increase.”
It would seem that the decrease in houses for rent is probably the result of people who had previously taken their houses off the sales list, returning to the market with more realistic expectations in terms of sales price, leading to an increase in sales of houses.
Flats on the other hand are traditionally the area favoured by first time buyers and buy to let landlords. These two groups of people are finding it very hard, in the current climate, to achieve mortgages so the flats remain on the rental market causing an oversupply.
