Problems in obtaining mortgages, worries over double dip price falls, large deposits insisted upon by mortgage lenders and a shortage of properties have been named as contributing factors for a surge in tenant demand and rental values being pushed higher, suggested the latest survey from RICS, (The Royal Institute of Chartered Surveyors).
The results from the survey concerning Q2 of this year show that 27% more surveyors reported a rise in rents, compared to 29% who reported a decline in rents a year ago. A 33% increase of surveyors are expecting rents to continue increasing throughout the quarter. Data from the survey captured a decline in available rental properties, which contributed to propelling higher rents. BTL restricted lending conditions were also viewed as a hindrance for landlords seeking to increase to their portfolios to facilitate the on-going demand for rental properties. However, as home-owners struggle to sell their own homes due to the current property market trends, many are choosing to put them on the rental market, which will alleviate present tenant demand.
Commenting on the RICS Survey, David Salisbury, chairman of the National Landlords Association (NLA) said,
“We welcome the latest RICS survey findings, which point to strong demand for rented property. The growing need for private-rented accommodation demonstrates the importance of the role played by residential landlords.
‘However it is not all good news. One in five landlords are experiencing rent arrears and many are concerned about the increase in capital gains tax. Added to the forthcoming cuts to Local Housing Allowance and the possibility of increased interest rates, it is clear any increase in rents will be quickly offset by these additional factors that have to be taken into account.”