Lettings market undergoes a revival

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The Independent Online

The lettings market staged a revival during the first quarter of the year as a shortage of homes pushed rents higher. The Royal Institution of Chartered Surveyors (RICS) said yesterday that 30 per cent more of its members in Great Britain reported seeing rising rents during the three months to April than those who saw falls.

The situation represented a sharp turnaround from the previous quarter, when an equal number of surveyors reported rising rents as those who saw falls. It was also a considerable improvement on April last year, when a record 58 per cent more surveyors said rents were falling, as the lettings market became flooded with properties that homeowners had been unable to sell.

Surveyors are optimistic the market will continue to recover, with 36 per cent expecting rents to continue rising – the highest level recorded since the survey was first started.

The group said rents were being driven higher by a continuing decline in the number of houses and flats available to let. About 12 per cent more surveyors said they had seen a fall in instructions from landlords than those who saw a rise, as the so-called accidental landlords sold their properties rather than continue to rent them out.

Meanwhile, demand for rental property remained strong, with 30 per cent more surveyors reporting a rise rather than a fall, the highest level since January 2009.

Jeremy Leaf, a spokesman for the RICS, said: "With sellers back in the housing market, supply has fallen in the letting sector. Moreover, the news that buy-to-let specialists are lending again may also encourage investors to return to the market." But he added that plans to increase capital gains tax may encourage landlords to sell properties.

Tenant demand was strongest in London and the East. The only region in which it did not rise during the quarter was the South-west.