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More proof property rents and yields are rising

3rd February 2008 | back to article listings BACK    print this article PRINT

Front page news in the FT this weekend - more evidence of an incredibly strong rental market in London and as we have already seen in Paragon rental survey data this is spreading to the rest of the country - good news for property investors.

We stand by our analysis of the detail in various letting surveys recently (including RICS and Paragon) giving strong reason to believe that strong growth in rents will be continued this year - Liam Bailey at Knight Frank thinks rents will rise just 4-5% this year compared to 15% last year - he will probably be proved wrong to a significant degree - we reckon that RICS and Paragon rental surveys will show 2008 had a national average 10%+ rental growth this year.

At risk of being accused of trying to start a public 'cartel' - now is the time for all of us to raise rents and to raise them strongly - take advantage of the sales market weakness, the greater numbers looking to rent rather than buy and the rental part of the property cycle and increase your rents at least 10% this year. Letting agents won't do it for you as they are generally not very pro-active - do your research, call them and ask them to raise where possible. If you get a tenancy change try pushing your rents up hard otherwise agree lesser growth in return for an existing tenant staying on in the property or a new tenant taking a longer tenancy - either way will reduce your voids for the year and again increase your property investment net yield.

Stuart Law

This news story has come from the property investment blog by Stuart Law, CEO Assetz plc.

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