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Increased demand
from tenants and low levels of rental property coming onto the market pushed rents
higher in the three months to April, says the April 2011 RICS UK
Residential Lettings Survey.
Overall, 42 per cent
more surveyors reported rents rose rather than fell in the three
months to April (up from 40 per cent more). Although rents increased
across Great Britain, it was London and the South East which saw the
most notable increases.
Comments from surveyors
reveal that rents in some areas have now risen so sharply that
previously affordable homes are now unattainable to many, as an
increasing number of renters are priced out of the market.
Meanwhile, home
ownership remains out of reach for many would-be buyers, partly
because of the high deposits required by lenders, but also due to the
cost of available mortgage finance.
As a result, surveyors
report that many people have little choice but to rent. In the three
months to April, 35 per cent more respondents reported demand rose
rather than fell – the highest level for over two years.
Turning to supply of
rental property to the market, 6 per cent more surveyors reported new
instructions from landlords increased rather than fell – taking the
net balance into positive territory for the first time since April
2009.
Instructions from
landlords to let flats showed the most pronounced change, with a net
balance of +6 per cent (from -7 per cent). The increase for houses
was slightly less than in the previous three month period (+2
compared with +5 per cent).
Despite an upturn in
new instructions, supply to the market still remains unable to keep
up with demand. Tenants are staying longer, resulting in less
availability, while fewer landlords are selling their properties at
the end of a tenancy. Just 2.8 per cent of landlords sold property in
the three months to April (down from 4 per cent).
Looking ahead, the
overall rental outlook remains strong, with 33 per cent more
surveyors expecting rents to rise rather than fall. Expectations for
rental prices were highest in London, followed by the Midlands, the
South East and the North.
Get the latest RICS Residential Lettings Survey.
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