Wednesday, May 26, 2010

Information from the RICS Lettings Survery 2010

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A lack of supply is pushing rents higher signalling a revival in the lettings market, says the latest RICS Lettings Survey published today (26 May 2010).

The net balance of chartered surveyors reporting rising rather than falling rents rose from zero to 30 percent – a marked contrast to April last year when 58 percent more chartered surveyors were reporting falling rents, an all-time low for the survey. Surveyors are optimistic that rents will continue to rise with the rental expectations net balance climbing to 36 percent – the highest figure recorded in the survey’s history*.
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 gross yields are has turned positive for the first time in a year.

RICS spokesperson Jeremy Leaf commented:
“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.”

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*The RICS Residential Lettings Survey began in 1998. This quarterly survey provides a comprehensive picture of the lettings market across England, Wales and Scotland as well as a regional breakdown. The survey includes trends in tenant demand, gross yields, rent expectations and average monthly rents broken down by region and property type.
RICS is the world’s leading qualification when it comes to professional standards in land, property and construction.