RICS Predicts Increases in Rent Rates

The Royal Institution of Chartered Surveyors (RICS) has recently published its report on UK rental property market, which suggests that the number of rental properties in Great Britain is rapidly and steadily decreasing, which in its turn should lead to higher rents as well as for less choice. RICS report reveals that the number of estate agents reporting a rise in new instructions from buy to let landlords grew by 6%. According to RICS experts, the decline in the number of residential properties to let is caused by substantial decrease in the number of so-called “accidental landlords”, UK homeowners who chose to let their properties rather than sell them as a result of declining house prices. “Accidental landlords” massively invaded the British property market last year as property prices dropped and people desperately needed money to keep up with their mortgage repayments; however, the summer months of 2009 were characterised by growing stability in the housing sector, which encouraged homeowners to sell their houses. RICS spokesman is determined that the decrease in the number of rental properties is the first real effect of residential property market stabilisation on the lettings industry. Evidently, the decrease in the number of rental properties had its influence on rent rates, which had a tendency to decline in the past months. In the 2nd quarter of 2009, only 29% of surveyors reported a fall rather than a rise in rent rates, which compares to 55% in the 1st quarter. The good news for landlords is that UK lettings and estate agents are determined that rent rates will rise significantly in the coming months. Moreover, RICS spokesman said that as the positive trend in the housing market is expected to continue, landlords can hope for steady improvement in the residential rental market. Naturally, what is good news for landlords is bad news for tenants. People looking for affordable accommodation might soon be placed in a disadvantaged position not only because of increased rent rates, but also because of a narrowed choice of rental properties available.