More homeowners renting out property

The housing market downturn is forcing increasing numbers of homeowners to rent out their property because they are unable to sell it, figures have shown. The Royal Institution of Chartered Surveyors (RICS) said during the three months to July instructions to let properties increased at their fastest pace since its survey began. Overall 43 per cent more chartered surveyors reported seeing a rise in the number of new landlord instructions than those who saw a fall, up from 30 per cent during the previous quarter. The group attributed the jump to frustrated sellers opting to become landlords after being unable to sell their home in the current market. It added that the credit crunch and housing market downturn had also boosted demand for rented property as people either delayed buying or were unable to obtain a mortgage. Tenant demand rose at its fastest rate since 1998, with 37 per cent more chartered surveyors reporting an increase in lettings than those who saw a fall, up from 30 per cent during the previous quarter. The group said demand for family homes was particularly strong, with 43 per cent more surveyors reporting an increase in the number of house lettings than those who saw a fall, compared with 34 per cent more who reported a jump in demand for flats. Rents continued to rise during the three months, and this, combined with falling house prices, helped to boost the yields buy-to-let investors made on their properties. But despite the strong level of demand for rented property, chartered surveyors expect rents to fall slightly during the coming quarter, pushed down by oversupply in the sector.

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ITN | August 19, 2008

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