Landlords have seen a slight decline in rental demand as first time buyers sought out to purchase and take advantage of the stamp duty holiday that could save them 1 per cent of the purchase price up to £2,500.  The stamp duty holiday that ended on March 24 was available to first time buyers that purchased a property up to the level of £250,000.  It is estimated that in the last two years while the stamp duty holiday was in place it assisted 180,000 first time buyers.  The approaching holiday expiration led many first time buyers to abandon their rental properties in the beginning of the year to climb onto the property ladder.

The rental market is still very strong however as there are many more households that are unable to buy versus those that were able to take on a new purchase.  According to BM Solutions in 2011 the average monthly rent climbed to £716 from the average of £682 seen in 2010. 

Phil Rickards, head of sales at BM Solutions, said, “There is a very healthy demand for rental properties across the UK right now, which in part may be driven by the costs associated with buying a home.

“Average gross yields on a buy-to-let property have been just over 6% for the past two years, driven by growth in rental values.

“However, with house prices likely to remain broadly flat again this year, buy to let landlords can again expect little capital gain on their investment in 2012.”

Landlords have benefitted from an increase in buy to let remortgage products from landlords to build their portfolios and further meet demand from renters.