Rental returns continue to fall

Good news for renters is bad for landlords, with rent continuing to fall as market is flooded with homes but no buyers, according to research.

Average monthly rents have dropped 16% from £937 in May 2008 to £810 now, according to website EasyRoommate.com. The persisting decline is showing no sign of abatement as frustrated homeowners who have put their houses up for sale struggle to find buyers and instead opt to rent them out.

A total of 62,765 rental properties came on to the market during April, 9% more than the previous month. This is the first time for more than 18 months that it topped 60,000.

It was also the fifth consecutive month that the availability of rental properties increased, as homeowners who have been unable to sell in the current market opt to rent out their homes instead.

Belfast saw the most dramatic change in April, with a 147% increase in the number of properties put up to rent compared with March, followed by Woking in Surrey at 118% and Nuneaton in Warwickshire at 103%.

Lincoln, Shrewsbury, Newbury, Rugby, Hove, Margate and Glasgow also saw increases of more than 60% in the supply of rental properties available in the last month.

Despite this it is not all doom and gloom for landlords as there were signs of supply decreasing in certain areas of the country, with Liverpool recording a 29% fall in newly listed properties being rented. Manchester and Sheffield also exhibited declining numbers of 18%.

Jonathan Moore, UK & Ireland country manager of EasyRoommate.com, said: "The rental market has suffered badly from the influx of accidental landlords pushing down rental values.

"However, we would expect average rents to recover in the second half of the year as activity in the residential property market starts to pick up and many homeowners, who were forced to rent their properties, start looking towards selling them on.

"This should help push rental property numbers back down to normal levels."

The figures were based on data from property website Globrix.com.

www.EasyRoommate.com

www.Globrix.com