Rents up 4% and more to come, letting agents promise

Landlords have seen rents rise by more than 4% in the past year as a shortage of mortgages and lenders demanding large deposits has stopped would-be homeowners from buying. Estate agents claim the number of properties coming to the market for sale is falling, while the number of potential buyers is rising, according the the Royal Institution of Chartered Surveyors (RICS). This bottleneck of sales is creating tenant demand, which in turn is encouraging landlords to put up rents. The trend is likely to continue, explains RICS in their latest residential lettings survey for the three months ending July 3, 2012 - and the prediction is rents will continue to increase at by 3.9% over the next 12 months. To make matters worse for tenants, the number of good letting properties coming to the market is falling - with 2% of letting agents confirming they have fewer homes listed to rent. Can tenants pay more rent? The rate of rent increases varied across the country - with the highest levels reported in the North West (6.9%), while rents in Wales have stayed the same over the last twelve months. Increasing rents have pushed up gross yields, leading fewer landlords (3.3%) opting to sell properties at the end of the tenancies. Peter Bolton King, RICS global residential director, said: “It is interesting to see that the huge growth we have seen in demand in recent years has started to gradually slow. While tenant interest is still riding high, what remains to be seen is whether many are willing to meet the increasing rents being demanded by landlords. “It is clear that we have seen rents grow steadily right across the UK for some time. This is partly down to the problem of the scarcity of mortgage finance and the large deposits required by lenders. These barriers to homeownership need to be addressed alongside the shortage of new stock coming to the market."

Landlord blog

Sam Dickinson

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