RICS Lettings Market Survey

Tweet

UK Rental increases slowed at the end of last year as some tenants began to resist the sharp rises in rent levels seen in recent quarters, according to the latest RICS Residential Lettings Survey.

The latest RICS Residential Lettings Survey shows rents continuing to pick up, but the pace of rental growth moderated further in the three months to January.

Continued strong demand from tenants is putting upward pressure on rents, although surveyors say that the supply of properties for letting also continues to rise.

Rental prices continued to increase across the UK, albeit at the slowest pace in two years, in the three months to January with a net balance of +13% of surveyors reporting increases in past rental values (from +21% in the previous quarter) and expectations are for rents in the next three months to rise at a slower pace also.

Looking to the future, 14 % more surveyors across the UK expect rents to rise rather than fall.  Respondents suggested that after strong gains over the past 12 months, rents are reaching a plateau, and the market may become a little more stable. The proportion of UK landlords choosing to sell their property at the end of a tenancy increased from 2.6% in the previous period to 4%, which may reflect the rush of first-time buyers seeking to purchase before the beneficial stamp-duty rate ends this month.

These UK-wide figures are however the average of regional variations: The rental picture was most positive in the South East of England, followed by Scotland, the Midlands and Wales. The outlook for rents on balance is positive, but it is a little more cautious in London and the East, where the net balance has turned negative for the first time.

From our perspective here in Inverness, the usual January rush of tenant enquiries didn't materialise this year but tenant demand did pick up in February.  Similarly new instructions have until recently been slack. There are indications now however of some new buy-to-let activity and I believe that 2012 will see some resurgence of this as mortgage finance is more readily available. Tenants are also tending to stay on longer. Inverness hasn't seen the volatility of southern markets and, on balance, I anticipate a continuation of the steady and gradual increase in rents that we have seen over the last few years.

J R Gell MRICS

Director, Simply Let

Download the RICS Lettings Market Survey