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‘Rents to start rising’ says RICS

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Residential rents are expected to rise in the New Year as the number of rental properties available fell for the first time in almost two years, says the Royal Institute of Chartered Surveyors (RICS).

As the housing market looks to establish itself once again following years in the cold, the number of properties, in particular houses, being made available for tenants decreased.

Demand for rental property is rising, with 16% of surveyors seeing more activity over the past three months and, in particular, demand for houses is very strong, with 22% more surveyors reporting rising rather than falling numbers of people looking to rent.

This is in stark contrast to late last year when the housing market was still suffering from falling prices and many would-be sellers were turning to the lettings market for extra income as their houses failed to sell.

With tenant demand still strong, but a lack of rental properties available, the reduction in supply means 22% of surveyors are predicting a rise in rent over the next three months, despite only 4% actually reporting a recent increase.

“It seems the current upward trend in the housing market is having a more significant effect on the lettings market, with many of the accidental landlords returning to the sales market to take advantage of the recent price increases,” said RICS spokesperson Jeremy Leaf.

“As a result the recent oversupply is reversing, with new instructions at the lowest levels we have seen. This of course is impacting on prices and tenants no longer have as strong a bargaining power as they did.”

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Written by Andrew Hodges

December 9, 2009 at 6:04 pm

Posted in Comment, LinkedIn

Tagged with ,

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