Rise in rental demand being caused by uncertainty in housing market
Rents are rising at their fastest rate for over three years, says the latest research from RICS. The rent increases are due to rising tenant demand which is outpacing newly available rental properties in the market.
David Whittaker, Mortgages for Business managing director, says: “The rise in demand can be attributed to recent interest rate rises. Would-be buyers are opting to rent, sitting out the uncertainty in the current housing market.”
This latest RICS report is supported by the Paragon Mortgages’ November 2004 buy-to-let index, which reported that investors are now making more that £31,000 gross on their buy-to-let properties. Landlords’ rental incomes have also risen by 2.5% over the past 12 months with yields also rising by 0.72% to 6.66%.
“This latest report from RICS is encouraging, but investors should continue to take a long term view of their residential property investments and hold them for a number of years. As a long term investment residential property, despite its past cyclical nature, has always enjoyed substantial returns.”