The PRS in Numbers: Q3 2011
October 26, 2011
Every quarter, the Young Index investor sentiment report presents a snapshot of the Private Rented Sector (PRS) by polling the expectations of individual investors. The research covers appetite for investment, capital growth and income expectations and, this quarter, the perceived impact of professional asset management.
Here, Young Group presents the Q3 2011 headline statistics; the PRS in numbers.
The Impact of Professional Property Management
- 76.6% of landlords believe that tenants pay higher rent for properties that are professionally managed by an agency.
- 82.9% of landlords believe that average tenancies are longer for property that is professionally managed.
- 81.3% of landlords believe that tenants take better care of a property that is professionally managed.
- 73.0% of landlords believe that professional management of property enhances its capital value.
- 85.7% of landlords think that professional property management is money well spent.
- 77.6% of landlords would recommend using a professional property management company.
- 81.0% of landlords questioned employ an agent to manage their property.
- 17.2% manage the property themselves and 1.7% of landlords’ properties are managed by a member of their family or friend.
- Of those who do not use the services of a managing agent, 100% cited cost saving as an influencing factor in their decision, and only 18% enjoy doing so.
- 63% of landlords who manage their own properties agree that using a professional property manager results in tenants paying higher rent and 55% believe that it enhances the capital value of their asset.
- Interestingly, 50% of those who do not currently retain property management services would recommend to other investors that they employ professional property managers.
Looking to the Long Term
- 95.2% of landlords intend to hold their residential property investments for the next 12 months.
- 85.9% intend to hold their assets for at least 10 years.
- 25.0% of landlords intend to retain their property investments for the next 20 years or more.
- The average period that residential property investors expect to hold their property investment assets is 13.5 years.
Appetite for Acquisition
- 33.4% of investors are considering purchasing additional residential property assets within London over the next 12 months.
- 12.5% of investors are looking at opportunities in the UK outside of the capital.
Capital Growth & Income Return
- 78.6% of respondents believe that London prices will be at current levels or higher by this time next year.
- For UK property outside of the capital, 54.8% expect prices to be at current levels or higher by this time next year.
- Landlords expect London property prices to see a small average price increase of 0.9% by this time next year with rents increasing by 2.47%.
- The predicted 12 month outlook for UK property prices outside the capital is a fall of 1.6% with rents remaining broadly flat, increasing by 0.3%.
Base Rate Expectation
- The average base rate expectation for Q3 2012 stands at 0.73%.
Click to download the full Young Index Q3 2011 report.