The more positive picture for rents can be attributed, in part, to the continued decline in the supply of both flats and houses in the marketplace. 12 percent more chartered surveyors reported a fall rather than a rise in the number of new landlord instructions for this period. The upturn in the housing market has tempted many of the accidental landlords to sell up with new instructions for sale on estate agents books now rising.
However, one consequence of the turnaround in the rental trend is that the net balance of surveyors reporting an increase in gross yields has turned positive for the first time in a year.
Significantly, demand for property to let remains strong with 30 percent more respondents still seeing it rise than fall, the strongest reading since January 2009. Houses remain marginally more popular than flats but flats are starting re-establish their appeal.
RICS spokesperson Jeremy Leaf said:
"With sellers back in the housing market, supply has fallen back in the lettings sector. This is good news for landlords as rents are set to move higher in the coming months and yield returns are likely to improve. Moreover, the news that buy to let specialists are beginning to lend again may also encourage investors to return to the market.
"However, the prospect of higher capital gains tax on the sale of property may in the near term encourage some existing landlords to take advantage of the current more benign tax regime."
Commenting on the RICS survey, Nigel Lewis at FindaProperty.com, said:
“Our rental index has also shown a lack of supply forcing rents up over the last few months. Some of our member agents are reporting stock levels down by up to 60% in some parts of central London and the South East,” says Nigel Lewis.
“This is being driven by a lack of churn in the market. There is still a level of uncertainty among would-be buyers and a large number of tenants are deciding to stay in their current rented homes rather than braving the property ladder. Reluctant landlords are also playing a part as they finally off-load their properties now the sales market is picking up. This combination has squeezed the supply of rental property and pushed rents higher.”
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