Rents rising faster than house prices: Rics |
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Sat, 03 Sep 2005 18:15
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LONDON - The Royal Institution of Chartered Surveyors has revealed that rents have risen faster than house prices for the first time in four years in the three months upto July. This shows that the fears of a house price crash have abated and people are slowly but surely beginning to invest in the housing market.
"August's interest rate cut is unlikely to reduce tenant demand as tough affordability means renting remains the only realistic option for many," said Jeremy Leaf of Rics. The survey fund that almost two-thirds of these new investors are in the 25-35-years age bracket. Rics added that existing landlords were now unlikely to let go of their properties when rentals came up for renewal. "The return of buy-to-let investors to the market is a result of expectations that interest rates have peaked. They may also have been encouraged by the fact that the housing market, though subdued, has not collapsed, despite widespread fears it would do so," observed Leaf.
The average rent being collected across the country for all types of properties was £753 a month in July with a low of £569 for a one-bedroom flat and a high of £1,229 for a four-bedroom detached house. Tenant demand has soared with flats being in much demand, prompting more buy-to-let investors to take a plunge into the market. Milan Khatri, Rics economist said that buyers felt that house prices are heading for a dip and hence are preferring to rent rather than buy properties outright.
The Office for National Statistics corroborated Rics’ findings by saying that in the past 12 months rents have risen by 3.8 percent across the country.
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