The latest RICS Residential Lettings Survey published this month has shown that a falling supply of new property to the rental market coupled with increased demand led to a rise in rents in the last three months and it does not show signs of stopping.
39 per cent more surveyors reported seeing an increase in rents over the three month period. The net balance reading is now at its highest level since Q2 2007 as increasing numbers turn to the rented sector. Many are seeking to rent rather than buy due to difficulty in securing mortgage finance and the high deposits required by lenders. As a result, surveyors report the rental market remains buoyant, with properties being let very quickly and landlords experiencing very few voids. Demand for rented property continues to be very strong, with houses being slightly more popular than flats.
New landlord instructions ─ a good indication of supply to the market ─ slipped further, marking five consecutive quarters of falling instructions. Respondents report that difficulty in securing buy-to-let mortgages is holding back many would-be landlords, and a fresh supply of property entering the market. Meanwhile, renewed falls in the sales market saw fewer existing landlords choosing to sell their property at the end of a tenancy agreement.
Looking ahead, the outlook for rents over the next three months remains very firm. 34 per cent more surveyors expect rents to rise than fall, with the expectation that rents for houses will increase at a slightly faster rate than for flats.
Locally in Bournemouth, although we have not seen the dramatic rent increases that London has experienced, the demand for quality rental property is high. We have seen very few tenants vacating property in the last three month with most choosing to renew their tenancy and at an increased rent.
The future still looks bright for rentals and with the sales market still suffering, there are some fantastic rates of return available for the investor landlord. If you are thinking about buying-to-let or are looking for an agent to help with renting your property – give us a call on 01202 55 33 35.
08/12/10
