20 percent more chartered surveyors report a rise in rental levels, with rents climbing at their fastest pace since July 2001. Economic growth, rising employment and inward migration from EU accession countries (Government estimates stand at 329,000 since EU expansion) have increased upward pressure on rents. Surveyors are confident the upward trend will be sustained in the next quarter.
Instructions to let property continued to grow at a steady pace but have been outstripped by tenant demand for the eighth consecutive quarter. Tenant demand in London accelerated to twice the long run average with rising rents pushed by migrant labour amongst other factors.
Investors are holding on tight to their existing properties. The proportion of landlords selling property where tenancies have expired dropped to 3.8% in the quarter to April, the lowest outcome in two and a half years.
RICS spokesperson Jeremy Leaf commented:
"Investors are holding fast to property as healthy house prices and strong tenant demand hearten expectations of capital growth. The news is not so good for first time buyers with house prices continuing to rise and the alternative of renting steadily becoming more expensive.
"Economic prosperity and population migration have increased rental demand making conditions better for property investors. The recent choppy ride for equities means interest rates are less likely to rise which is good news for investment."
