Britons are in the process of selling investment properties due to mortgages becoming more expensive, with rental yields decreasing.
Royal Institution of Chartered Surveyors (Rics) recent figures highlight how tenant demand has decreased and more buy to let properties are coming onto the market.
House buyers are back in the market in order to avoid high borrowing costs, due to drop in demand for rental property .
There is a greater supply on the property market as a result of a rush to not pay upfront costs of home information packs.
There has been a 12% fall in the number of estate agents reporting an increase in lettings compared with October.
The number of landlords selling investment properties has risen to 5.2%, the highest in two years.
Gross yields on investment property went down for the third quarter in a row, decreasing at the fastest pace since July 2004.
As tenant demand falls, increasing mortgages mean buy to let property investors putting up rent to compensate for increased costs, with 29% more surveyors reporting an increase as opposed to a decrease in rents, 1% less than the record figure.
Higher borrowing costs and a drop in yields have added to landlords worries.
Interest rate increases later in 2006 are likely to have a further dampening effect, yet the strength of the economy and an active housing market are likely to ensure a soft landing for many.
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Increasing Costs Mean Property Investors Are Selling Up
Tue, 05 Jun 2007
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