Britain’s letting market has continued its post-recession rebuilding after an increase in tenant demand and shortage of properties drove rental prices skywards.
According to the Royal Institute of Chartered Surveyors (RICS) Residential Lettings Survey, 26% more chartered surveyors reported a rise in rental property demand rather than a fall over the past three months, the second successive quarter in which demand has risen.
All regions witnessed increased interest during this time, but London and the East of England lead the way.
Experts claim that continued difficulty in securing mortgage finance, worries over a double dip in housing and large deposits required by lenders, means renting has become a more viable option than buying.
As a result, rental prices increased for the second consecutive quarter, with 27% more surveyors reporting a rise in rents than a fall, stark contrast to a year ago when over supply pushed rents down and surveyors reported falling not rising rents.
However, despite preferable market conditions, investors haven’t started flooding the sector quite yet. New supply of property to the market remains low and has now fallen for four consecutive quarters, albeit at a slightly slower pace.
But existing landlords are also not in any rush to dispose of their property, with just 4.1% of landlords intending to sell their properties at the end of a tenancy agreement.
“The latest RICS Housing Market Survey shows a lack of funding has stifled demand from buyers which may cause some moderation to rents as more opt to let than sell," commented RICS spokesman James Scott-Lee.
“However, existing landlords keen to expand their portfolio may still be struggling to access the necessary finance despite improved market conditions.”
Those hoping to begin renting in a buoyant market should seek advice before opening their doors, making sure that properties and letting contracts adhere to legal requirements.