Flawed rent surveys give false image of buy to let

AFS Team·5 December 2012·3 min read
Flawed rent surveys give false image of buy to let
Misleading property stats are giving a false impression of the private rental market, according to trade body the British Property Federation (BPF). The group claims unofficial surveys on rents in the marketplace from letting agents, landlord insurers and web sites are flawed. The BPF lists three main areas of concern: • Figures are often based on ‘advertised' rather than ‘achieved' rents • Statistics are based on new lets without accounting for long-term occupiers who are not moving, and who will often not see their rents rise annually • Sample sizes for some surveys are too small to give valid results The portrayal of figures from these surveys in the media can create an inaccurate picture of the buy to let market, claims the BPF. For example, one survey suggested private rents were rising rapidly, even though a 10% figure over four years would have undershot official inflation figures and was less than the rise in social housing rents. Another forecast a rent rise of 2% was somehow excessive, even although recent growth in inflation exceeds this, and 2% is on a par with recent average earnings growth. BPF chief executive Liz Peace said: "Some of the figures that have been bandied around trumpeting large rent increases are very misleading and do not reflect the picture across the entire country. "While in some hotspots rents are rising more than average, across the country as a whole about 85% of rents are rising below the consumer price index according to reliable figures.” "For a long time we've been calling for more reliable rental figures and I welcome the UK National Statistics consultation that has just closed, which is looking to improve its statistics on residential rents, and we support the suggested switch to more reliable data. The larger sample size should lead to improvements in the quality of data and provide a more comprehensive picture across the whole market." BPF members comprise the biggest companies in the property sector, like property developers and owners, institutions, fund managers, investment banks and professional organisations that support the industry.