RICS Residential Lettings Survey
Q3 2011
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Firm demand means rents continue to rise
- Rents continue to rise and are expected to increase
further in the near term - Instructions edge upwards, but strong demand is
underpinning the firm rental picture - Rental expectations remain positive across most of
the country
The RICS Residential Lettings Survey October 2011 (for the three months to October) shows rents continuing to rise, but at a lesser pace than seen in the previous period. Demand from tenants has increased further, as have new instructions, but the former still appears to be outpacing the latter. According to respondents, demand for rented property is being buoyed by the would-be buyers who have been forced into the lettings market
as they struggle to access mortgage finance.
Rents rose further at the headline level, but the pace of growth was somewhat more moderate than that recorded earlier in the year. Despite that, the proportion of respondents expecting a further increase in rents picked up, moving a touch from +23 to +25.
Higher rents are continuing to drive up yields, where the net balance has now been in positive territory for close to two years. Significantly, fewer landlords are opting to sell at the end of a tenancy agreement, with the percentage planning to do so edged down to 2.6%.
From a regional perspective, rents in London picked up at the fastest pace, while they rose more modestly across the North, the South East, the Midlands and Wales. Meanwhile positive tenant demand across all regions is supporting the rental outlook; expectations remain upbeat across the whole country.
