Shortage of homes for sale boosted lettings market in Q1

The lettings market saw a sharp upturn in Q1 2010 as a shortage of homes pushed rents higher.

The Royal Institution of Chartered Surveyors says 30% more of its members reported a rise rather than a fall in rents in the three months to April, up from a net balance of zero for the previous three months and an all-time low of 58% reporting falls in April last year.

Some 12% more surveyors reported a fall rather than a rise in the number of new landlord instructions in Q1.

A spokesman for RICS says that with sellers returning to the market lettings supply has fallen.

He says: “This is good news for landlords because rents are likely to move higher in the coming months and yield returns are also likely to improve.

“The news that buy-to-let specialists are beginning to lend again may also encourage investors to return to the market.”