RICS finds demand for rented property at its strongest

RICS finds demand for rented property at its strongest

	Published : Tue, 29 Nov 2005 11:40 By : Andrew Stead Print this Story

LONDON: Demand for rented property peaked during the three months ended October since January 2004, according to findings by the Royal Institution of Chartered Surveyors. It said 23 per cent more surveyors had seen a rise in the number of people wanting to rent during this period and most of this had been in London and the south-east.

RICS attributed the rise to an improved labour market and partly to many potential house buyers postponing their decisions in an uncertain property market. An increased immigration into the U.K. following the accession of the eastern European states into the European Union has also impacted some areas.

RICS said the level of rent being charged also rose for the 10th quarter in a row, and gross yields rose for the third consecutive quarter.

However, it did not report any improvement in buy-to-let investment saying this has been subdued over the past 18 months as a result of higher interest rates in 2004 and the end of strong house price inflation. Investors want to stay in the market as indicated by a fall by 4.1 per cent in the number of landlords who wanted to sell their property when the tenancies came up for renewal.

RICS said property companies are active in the market, having increased their share from 5 per cent in April to 8.7 per cent in October. It also said the average monthly rent was 753 pounds, with regional variations -- a three-bed semi-detached in Wales cost 485 pounds, while in London it cost 1,950 pounds.

RICS said the continued uncertainty over pensions in the country forced investors to hold on to properties for the long term. RICS spokesperson Jeremy Leaf said many buy-to-letters are now choosing to stay in for the long haul, viewing their investment as a more significant part of their pension plan.

The observations come on the eve of the submission of the Turner Commission report into the state of pensions in the country.