Mortgage famine fuels buy to let rent risesMake Text Bigger
Rent rises are fuelled by a mortgage famine that is forcing home owners that cannot sell to become reluctant landlords who have to rent themselves to move on.
The latest lettings survey by the Royal Institution of Chartered Surveyors (RICS) shows rents have followed an increasing trend since 2009.
RICS reports that 13% more letting agents saw rent rises rather than decreases in April, and that increasing demand is leading to rents going up as the number of homes to let falls.
The survey also revealed the number of letting agents signing up tenants seeking homes was up 15%, and most wanted to rent houses not flats.
The number of new landlords wanting to rent homes was up 7% – and many were homeowners who could not sell but needed to move.
The report also notes that some landlords are asking too much for rent and that prices will fall – and that this is already happening in London.
RICS argues that the main pinch point leading to house sale problems is lenders failing to approve mortgage applications while demanding deposits that many working families find out of reach.
This policy has forced the average age of first time buyers up to 37 years old.
Gross yields for landlords were up across the country except for London – unsurprisingly as the result of rising rents and falling house prices.
Peter Bolton King, a director of RICS claimed: “The rental market is still fairly buoyant and this looks likely to continue, given the challenges facing the sales market. Indeed, mortgage finance may become even harder to access particularly for first-time buyers if the euro crisis continues to deepen.
“This points to tenant demand continuing to outpace supply. As a result, rents will remain on an upward trajectory, adding to the pressure on many households whose incomes are already being squeezed.”
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