17:05 PM, 7th December 2011, About 10 years ago
A shortage of homes to rent is pushing yields up for landlords – and the trend is likely to continue, say letting agents.
Yields have risen for 21 months in a row according to the latest buy to let market review for the three months ending October 31 from the Royal Institution of Chartered Surveyors.
Letting agents also reported rents are still increasing – but at a slower rate than earlier in the year.
RICS said lack of mortgage borrowing and job uncertainty were the main factors forcing home seekers to turn to renting.
Demand for homes to let is outstripping supply, but more homes came to the market in the quarter than at any other time since April 2009 as homeowners move to rent and let their former home behind them, explained RICS.
Letting agents reported rents in London rising at a faster rate than elsewhere.
RICS spokesman James Scott-Lee said: “The disappointing economic message communicated by the Chancellor in his Autumn Statement and the prospect of further job losses is likely to underpin the residential lettings market.
“Despite resistance to rising rent levels from tenants, in some places, the imbalance between demand and supply for rented property suggests that for the foreseeable future landlords will have a good if not increasing return on their investments.”
Meanwhile, a third of private renters are struggling to pay their rent , new research claims.
The British Social Attitudes study on housing produced for the National Centre for Social Research suggested that 32% of people think rents for private homes are too high – the percentage is more marked for social housing tenants, with 43% baulking at the cost of renting privately.
Nevertheless, only 19% of homeowners agreed more social housing should be built in their neighbourhoods, even though they recognised a need from more affordable homes.
Download the full RICS Residential Lettings Survey
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