A step-by-step guide to renting ¦ Property Guides on Times Online

Spiralling house prices have fuelled a boom in the rentals market. For many people, especially would-be first-time buyers saving for a deposit, renting is becoming the norm. There is also growing evidence that renting is a long-term choice; potential buyers are put off by high interest rates and stamp duty, and prefer the freedom of moving around when they feel like it. But before you start scouring Loot, read up on the ten things you need to know about renting:

1. Demand is up…

The Association of Residential Letting Agents reports that demand for rented property is at its highest for five years. Its latest quarterly survey found that two-thirds of letting agents in prime central London have more tenants that properties available. Across the South East, 57% of letting agents say that also have a shortage of properties to let, and add that the lack of stock is pushing up rental prices.

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2. …but not up north

In many Northern and Midlands towns and cities, however, there are more flats than tenants. Alastair Stewart, an analyst with Dresdner Kleinwort, says that there is a glut of apartments in Leeds, Manchester, Ipswich, Norwich, Leicester, Nottingham and Birmingham. “The proportion of new-build properties that are apartments has gone up from 21 per cent in 2000 to 49 per cent in the latest quarter”, he adds. The result is a “renters” market, in which renters are bargaining down prices.

3. How much does it cost?

The Residential Rental Price Index (RRPI) at rentright.co.uk monitors the cost of renting a home across the UK. Its latest figures report that average rental prices are falling, month-on-month. In November 2007, the average monthly rental was £825, in December 2007, it was £795 and in January, so far, it is £678 (figures are updated as properties are uploaded to the website). Studio flats are outperforming the market: since November 2007, average monthly rental prices have risen from £473 to a whopping £933.

4. A family affair

The latest research from the Royal Institute of Chartered Surveyors suggests that family homes are the most sought-after rental properties. More than a quarter of surveyors reported an increase in demand; agents attribute it to a rise in families who have sold up and are waiting to see what happens to prices in 2008 before purchasing their next property.

5. Staying power

The prime central London market has the most settled tenants, according to the Association of Residential Letting Agents. Tenants in areas such as Belgravia and Knightsbridge rent houses and apartments for an average of 17.7 months. Across the South East, the average tenant occupation is 15.2 months, compared to 14.2 months elsewhere in the United Kingdom.

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