Recent RICS figures show further increase in rents
The Royal Institute of Chartered Surveyors recently released figures confirming that private landlords are enjoying a lucrative boom in the rental market. The report for November 2010 – January 2011 showed a soaring demand for rental properties and around 40% of surveyors reported a significant increase in rents and 32% reporting a rise in rental demand. Since RICS records began 13 years ago this is the highest level on record.
It is thought that this has largely resulted from the huge swathe of people currently unable to get mortgage finance secured and therefore purchase a home. Mortgage availability is also not expected to improve for the foreseeable future and this, coupled with a general nervousness over the economy, means buyers are in short supply. Demand will therefore continue to outstrip supply and rents should continue to rise – bad news for the tenant but good news for the landlord. Surveyors expect rents to continue to rise throughout the year. Private rents have risen dramatically which is great news for landlords in more ways than one. Not only are rental yields high which leads to a higher return for the investor, many people are not able to afford these private rents which means housing associations are also seeing a surge in demand.
RICS spokesman Jeremy Lead confirmed that ‘the current buoyant state of the rental market is likely to persist for some time to come, given the challenges facing the sales market. It is unlikely that financial assistance for first time buyers will become much more readily available’.
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