Rental market welcomes 2010 improvements
Friday, 28th May 2010
Tenant demand for residential properties is rising at its fastest pace since January 2009, with the opening months of this year looking promising for future rental prices, claims the Royal Institute of Chartered Surveyors (RICS).
According to the latest Residential Lettings Market survey, 30% more surveyors have reported a rise in demand for rental property since the New Year. Demand for houses continues to outperform demand for flats, but, the rental market saw a significant improvement in the net balance compared with the final quarter of 2009.
“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,” commented RICS spokesperson, Jeremy Leaf.
"Moreover, the news that buy to let specialists are beginning to lend again may also encourage investors to return to the market.”
The positive outlook for rents can be attributed to the continued decline in the supply of both flats and houses in the marketplace. According to the RICS, the upturn in the housing market has tempted many accidental landlords to sell up with new instructions for sale on estate agents books now rising.
However, the RICS is encouraging sellers to strike while the iron is hot as more trying times may lie on the horizon. With the newly formed coalition government pledging to amend current capital gains tax laws, sellers’ profit margins may soon begin to fall.
“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,” added Mr Leaf.
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