View more on these topics

Rents raising at fastest ever rate for three years, says RICS

The Royal Institution of Chartered Surveyors residential lettings survey for three months to the end of October 2004, says rents are rising at their fastest pace for three years.

The rent increases are due to rising tenant demand which is outpacing newly available rental properties in the market. 23% more surveyors report a rise than a fall in tenant demand over the past three months, a 9% increase since July.

The rise in demand is a result of interest rate rises. Potential buyers are opting to rent, sitting out the uncertainty currently characterising the housing market.

There has also been a slowdown in rented property available as the Buy-to-Let boom tails off.

Rental demand for both flats and houses is up on the same quarter last year by 23 and 225 respectively.

Private sector tenants are dominating the market, accounting for 81% of lettings. Corporate tenants account for 95 of the market, down from 11% last quarter.

All regions have reported an increase in demand for rented properties. London saw the greatest rises in demand with the South West not far behind.

The average price for a two-bed flat in London is currently 1517 per calendar month. These are also the areas experiencing the greatest decline in house prices, according to the latest RICS housing market survey.

Gross capital yields are beginning to level out. Yields rose in London for the first time since April 2001. All other regions have shown a marginal fall.

Jeremy Leaf, spokesman at RICS, says: “There is definitely an increase in demand, particularly at the lower end of the market. Uncertainty about market prospects and poor affordability mean that people are opting to rent.

“Sellers and agents are facing a different breed of buyer. Enthusiastic buyers keen not to miss out on getting a foot on the property ladder have gone. Now the attitude of why rush is influencing demand for rental property.”

Recommended

Industry reacts positively to Charcol MBO

The mortgage industry reaction to Bradford & Bingley’s official announcement of the sale of Charcol, has been largely positive.The company confirmed that it had been disposed to Castlegate 342, a newly-formed company backed by a consortium of investors including Advantage Capital.In a release, B&B says Charcol had estimated net assets on completion of about 8m […]

PMS goes back on its exclusives decision

Premier Mortgage Services has decided against withdrawing its exclusive products from the Mortgage 2000 Encore sourcing system saying it hopes any issues can be resolved.On Friday PMS issued a statement saying it was withdrawing its exclusives with immediate effect. But following discussions with Mortgage 2000 managing director Sean Hornsby, PMS managing director John Malone says […]

Industry rules out housing market crash

The majority of the industry believe there will be a soft landing to the housing market and not the crash that some have predicted. Delegates at the Council of Mortgage Lenders’ annual conference today voted in favour of a soft landing.This came after David Smith, economics editor of The Sunday Times, spoke for the motion […]

Financial health matters

In the first of a two-part article, I argue the benefits of the increased availability of credit against any form of regulatory and state control over personal borrowing.

Newsletter

News and expert analysis straight to your inbox

Sign up