According to research from both the Royal Institute of Chartered Surveyors (RICS) and the Association of Residential Letting Agents (ARLA), the rental market had seen demand continue to increase as higher interest rates and worries over affordability forced would-be purchasers to think again.
However, according to RICS, some landlords in the South East had started to sell properties as the pressures forcing those into rental property also impacted on them.
Jeremy Leaf, RICS spokesperson, said: “Rising rents are offering some compensation for landlords that are experiencing higher borrowing costs, although buy-to-let investment will struggle for funding in 2008 as lenders become more discriminating, especially for ‘non-conforming’ properties.”
However, both RICS and ARLA pointed to higher rents being achieved off the back of increased demand, with half of ARLA members recording a rise in the last quarter.
In addition, although yields for flats have remained static, many surveyors expected them to climb in the coming months.
Jon Burridge, managing director of Quantum Mortgage Brokers, commented: “There are so many more flats than houses, so this will be the last area of the market that will be affected. It’s a little too early to tell though and I think we are sitting at a junction as to where we go from here. By October or November, we’ll have a better idea if this is the case.”
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