17:14 PM, 3rd March 2011, About 11 years ago 2
>Buy to let rents are rising fast as more tenants chase fewer properties, say letting agents. They returned the highest positive rating ever in the Royal Institution of Chartered Surveyors residential lettings survey as four out of 10 letting agents confirmed rents continued to increase.
Rental yields also surged ahead for the fourth consecutive quarter.
Letting agents say problems raising mortgages and lenders asking for large deposits are the main barrier to buying a home – and as a result many are forced to rent.
In the survey, for the quarter ending January 31, a third more letting agents reported demand was up and that tenants wanted houses rather than flats.
Besides private letting, the survey also looked at private student letting ad found numbers were from 9% of the market to 5%.
Lack of mortgages leaves renting as only option
The number of homes to let is decreasing, with 4% more surveyors reporting decreases, not increases, in the three months to January. The percentage of stock from private landlords has fallen from over 80% before 2009 to around 70%.
RICS explains that this is a result of the buy-to-let investors declining.
Letting agents are confident the market will stay buoyant, with 37% more predicting rents will rise rather than fall over the three months to April 2011.
RICS spokesperson Jeremy Leaf said: “The buoyant state of the rental market is likely to persist for some time given the challenges facing the sales market. It is unlikely that finance for first-time buyers will become more readily available, while uncertainty over the economy may also deter potential homebuyers.
“Demand for property to rent will remain strong and continue to outstrip supply. Rents will remain on an upward trajectory adding to the pressure on many households whose incomes are already being squeezed by rising inflation prices and the hike in VAT.”
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