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RICS Reveal Lettings Market Boom

Wed, 20 Aug 2008
Britain’s rental market is enjoying a boom as lettings continue to outperform housing sales, latest figures have revealed.

According to the Residential Lettings Survey for July from the Royal Institution of Chartered Surveyors (RICS), homeowners are struggling to sell their homes and opting to rent them out instead as the housing market downturn continues.

RICS revealed that agent instructions to let homes - an indicator of supply - rose at the fastest rate in the history of the report during the last quarter.

The poll found 43 per cent more of its professional membership reported a rise in landlord instructions than a fall.

According to the figures, tenant demand rose at its fastest rate since 1998, with 37 per cent of chartered surveyors reporting an increase in tenant lettings compared to 30 per cent during the previous quarter.

RICS said the surge in demand for rented property has been driven by the impact of the credit crunch and restricted lending with many homeowners either delaying buying a house or unable to obtain the mortgage they need to do so, forcing them to rent instead.

RICS spokesman James Scott-Lee explained: "The lettings market is booming with many vendors opting to rent their property while sales in the housing market continue to dry up. Many are willing to hold and await the return of capital appreciation."

"Becoming a landlord is now an increasingly profitable option with rising rents and yields offering good returns," he added.

"Established investors have been reaping the benefits of the housing downturn for sometime and will continue to do so in the short term."

The spokesman however warned that "ever increasing supply could have an impact on rental growth as tenant options increase."
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