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Rental market runs contrary to economy

April 12th, 2012

Despite the poor economic climate, the rental market continues to improve, with one expert explaining that the two always run contrary to one another.

Michael Banks, commercial director at Upad, said the lack of job prospects and security has a large impact on the rental market.

He explained that rental buoyancy has increased in poor economic conditions as people are less willing to buy homes when there are question marks over their jobs.

“The rental market runs contrary to the economy generally; the more uncertain the economy, the more buoyant the rental market,” he concluded.

In London, rents fell by 0.1 per cent in March, according to Knight Frank, which Mr Banks put down to the combination of top quartile of rental properties  being over-inflated, and downward pressures on executive salaries beneath the absolute top level.

However, he noted: “There is still confidence going forward. The whole idea of the extended double dip recession has rescinded, so people aren’t as afraid anymore.”

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