Rents on rise as homes to let demand soars

Rents are rising at their fastest rate for three years as demand for homes to let continues to soar.

Around 39 per cent more surveyors reported seeing a rise in rents during the third quarter than those that saw a fall, the highest level since the second quarter of 2007, the Royal Institution of Chartered Surveyors (RICS) said.

The group said the strong increase in rents was being driven by growing demand for rental property as potential first-time buyers continued to struggle to secure a mortgage and raise the deposit they needed to get on to the property ladder.

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A balance of 33 per cent of surveyors said they had seen a further rise in demand during the quarter, the biggest jump since 2008.

But the number of new properties that were available to let fell for the fifth consecutive quarter as landlords themselves struggled to get mortgages to expand their buy-to-let portfolios.

Surveyors said the mismatch between supply and demand had led to properties being let very quickly, with landlords seeing very few void periods.

The situation looks set to continue going forward, with 34 per cent of surveyors predicting there will be further rent rises, compared with those who expect falls, with rents for houses expected to increase at a faster rate than those for flats.

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The buoyant state of the rental market has led to very few landlords considering selling their property when their current tenancy comes to an end, with just 2.5 per cent saying they planned to do so.