December 2, 2005
Hesitant homebuyers drive up rentals
Demand for rented property in the last quarter was at its strongest since January 2004, according to the Royal Institution of Chartered Surveyors.
Around 23 per cent more surveyors had seen a rise in people wanting to rent during the three months to the end of October.
The RICS report claims that the rise was driven by a surge in activity in London and the southeast, and by an improvement in the labour market. It was also affected- by the decision of many potential homebuyers to “take a ‘wait and see’ approach to the housing market”.
With house prices barely moving, the level of rent landlords are charging rose for the 10th quarter in a row, while gross yields rose for the third consecutive quarter.
But Rics reported there was no evidence of a pick-up in buy-to-let investment. “Growth in landlord activity
has been subdued over the past 18 months, as a result of higher interest rates in 2004 and the end of strong house price inflation,” It said.
Rising yields have encouraged investors to stay in the market, according to the survey. The proportion of landlords choosing to sell their property when their tenancies came up for renewal fell to 4.1 per cent – half the level this time last year.
But fewer of those landlords are private individuals. Their, number has fallen steadily to 84.4 per ‘cent, of landlords since the peak of the buy-to-let boom in 2004.
Property companies are picking up the slack, increasing their share of the market from 5 per cent in April this year to 8.7 per cent in October.
The figures show the average monthly rent was £753. •However, the survey illustrated regional differences, with rent on a three-bed semi-detached in Wales costing an average of £485, while the same in London would set a tenant back £1,950.