More demand and less supply leads to rising rents
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Fewer properties and higher demand for housing has led to a rise in rents in the three months to the end of October, says the latest Royal Institution of Chartered Surveyors’ Residential Lettings Survey shows.
A total of 39% more surveyors reported rising rents over the three month period, than a fall, up from 27%.
The net balance reading is now at its highest level since Q2 2007 as increasing numbers turn to the rented sector and RICS says restricted mortgage finance and high deposits required by lenders are forcing people to rent.
Demand for rented property continues to be very strong with 33% more surveyors reporting a rise in demand.
New landlord instructions - a good indication of supply to the market - slipped further, marking five consecutive quarters of falling instructions.
The outlook for rents over the next three months remains very firm with 34% more surveyors expecting rents to rise.
RICS spokesperson Jeremy Leaf says: “The lettings sector has become increasingly strong over the past nine months, in contrast to the housing market which continues to slow. Many have turned to the rental market because they fear further price reductions in the housing market, or because they cannot obtain the necessary finance to buy.
“As a result, rents continue to rise with supply failing to keep up with demand. However, there are increasing indications that more landlords are recognising these benefits and looking to add to their portfolios - especially as there has been a rise in the number of providers willing to offer investment mortgages in recent months.”
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