Rental property at 4-year high

28-Feb-2006

Demand for rental properties in the UK is at a four and a half-year high after a house price surge has pushed many first-time buyers out of the market.

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The Royal Institution of Chartered Surveyors (Rics) has commented that confidence in the rental market is increasing, with many affordable housing schemes needed to assist them.

Figures reveal that rental yields on flats and houses are currently above the survey's average and are rising at their fastest pace since 2001.

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Rics believes that this boom in the rental market is essentially down to an upturn in house prices, which is pushing aspiring homeowners to look for alternative options.

However, the increase in tenant demand and rents has helped to bolster the confidence of many buy-to-let landlords, with August's interest rate cut also tempting new investors to the market.

"Buy-to-let investors are active once again, which will help dispel fears that an absence in first-time buyers will contribute to a significant slowdown in the wider housing market next year," Rics spokesperson Jeremy Leaf said.

Rics also commented that just five per cent of landlords managed to sell their buy-to-let investments in the three months to January, compared to seven per cent in the same period last year.

It went on the say that many buy-to-let landlords were still using revenue from rented property as their pension fund.

This is despite government plans to exclude the receipt of tax breaks for buy-to-let investors under self-invested personal pensions.

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