Rents soar amid loan drought

Rents are rising at their fastest rate for three years as demand for homes to let soars, according to the Royal Institution of Chartered Surveyors (Rics).

About 39 per cent more surveyors reported seeing a rise in rents during the third quarter than those that saw a fall, the highest level since the second quarter of 2007, the Rics said.

The group said the strong increase in rents was being driven by growing demand for rental property as potential first-time buyers continued to struggle to secure a mortgage. A balance of 33 per cent of surveyors said they had seen a further rise in demand during the quarter. But the number of new properties available to let fell for the fifth consecutive quarter as landlords themselves struggled to get mortgages to expand their buy-to-let portfolios.