PREDICTIONS 2011


increase on the average rent rate. I would advise any prospective landlord or small investment portfolio holder to buy now and benefit from next year’s competitive


rent rates and returns.” Judienne Wood, Lettings Director, Kinleigh Folkard & Hayward “The impact of the Government’s


Comprehensive Spending Review will continue to impact on the private rental sector throughout 2011 and I believe that there will be a nationwide increase in rents throughout the year. “The exceptional economic conditions


that we are currently experiencing are predicted to continue for the foreseeable future, and means that families are becoming poorer and may have to move further afield to find employment. Potential homeowners will continue to have difficulties obtaining mortgages and saving for a deposit. The residential sales market is bracing itself to face another dip. Families on lower incomes will have dramatic benefit reductions, including the end of a council house for life policy. “I think that all of these factors will result in investment landlords being attracted back to the buy to let market as they see better rental yields combined with lower purchases prices. There will also be the return of the accidental landlord who is unable or unwilling to sell their property and turns to the rental market as a viable alternative. Dorian Gonsalves, MD, Belvoir


With the mortgage market remaining a


closed shop to many would-be first time buyers, the pressure on the Private Rented Sector is only likely to increase. This, coupled with the underlying demographics of increasing housing demand – at a time when the supply of new homes is at an all time low – means that the current upward pressure on rents will continue well into 2011. Latest figures from LSL show that nationally rents have increased by an average of 4.5 per cent in the past 12 months to almost £700 per month, and in London and the South East, where the housing pressure is greatest rents are now 6.8 per cent higher than a year ago and Findaproperty reports that average asking rents in London are now £1,818 per month”. Neil Young, CEO, Young Group


Legislation “I predict that the Government will in


the near future reconsider its position on minimum standards for lettings agents and this could comprise the introduction of


14 JANUARY 2011 PROPERTYdrum


mandatory client money protection for lettings agents or a consumer redress system such as TPO Scheme, which is


already mandatory for estate agents.” Dorian Gonsalves, MD, Belvoir,


Finance “If at some point during 2011 mortgage


lenders decide to put their weight behind long-term investment landlords -and there is clearly a very high demand – this, combined with other positive factors in lettings - will produce a near perfect environment for the long-term property investor. Dorian Gonsalves, MD, Belvoir


“The return of “near prime” mortgages


will come for those who have only missed a couple of mortgage payments and we are already seeing a return of re-mortgaging. However we are not expecting 2011 to herald the return of 90 per cent plus LTV


lending in any real sense. Douglas Sleaper, Group Sales Director, Townends


“Economic growth and inflation continue to surprise on the upside, ensuring that the Monetary Policy Committee remains torn over the best course for monetary


policy. There remains a split between those advocating an extension of quantitative easing (so-called QE2) and those suggesting the Committee needs to begin tightening interest rates now. In our view, with fiscal policy being tightened, interest rates are set to remain at 0.5 per cent throughout 2011 and the prospect of QE2 will rise after weak growth data in


Q4 2010. Kiran Raichura, Senior Research Economist at Colliers International “I do not believe there will be a great


recovery in prices, but demand will strengthen as people still need to move. This in turn will help sellers. Key drivers for buyers will be the desire for a larger or smaller home, a good and safe environment to bring up a family, the proximity to schools, and a wish to live in the countryside while working in the city. There’s no better place for all this than the Cotswolds. Both buyers and sellers will be winners in 2011 with good marketing and


Property prices will fall steadily


until April the 29th, when the marriage of Prince William to Kate Middleton will lift the markets ‘feelgood factor’. Unfortunately, this will be short-lived (like England in the World Cup going out early) when they


divorce in July.” PauL Grimes, The WriGhT esTaTe aGency, neWPorT, isLe oF WiGhT


sensible valuations.” Sam Butler, Senior Partner, Butler Sherborn “Despite short-lived headline grabbing


products, the picture remains largely unchanged from the beginning of 2010. Any wholesale changes to the mortgage market remain a distant hope as banks are reluctant to lend. The same is true of development finance; those looking to fund construction need to look at new approaches and finance models to demonstrate commitment and capital of their own”. Neil Young, CEO, Young Group


“Mortgage finance is still the main


obstacle for those wishing to invest, but I think it is possible that we may see a few new landlords dipping their toes in the market as buy-to-let mortgage lending improves and the opportunity for long term investment and stable rental income continues to present itself as an attractive


proposition.” Caroline Kavanagh, Group Lettings Director, Badger Holdings Group


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