Home rents in the U.K. may rise in the coming months after continuous declines, as the supply of new properties coming on to the rental market dropped for the second consecutive quarter in the period November to January, a survey by the Royal Institution of Chartered Surveyors showed Tuesday.
The net balance of chartered surveyors reporting rising rather than falling rents in the three months to January 2010 was zero, following five quarters of negative readings. But, it was in marked contrast to April last year when 58% more chartered surveyors were reporting falling rents, an all-time low for the survey.
In addition, expectations as to the outlook for rents continues to strengthen with a net balance of 33% of respondents believing rents will rise over the coming quarter.
The more positive picture for rents can be attributed to the continued decline in supply of both flats and houses in the marketplace, RICS said. Demand remained strong during the period with 165 more respondents still seeing it rise than fall.
"The RICS housing survey has seen a steady increase in the number of new instructions coming on to the market over the past few months, whilst simultaneously we see with this survey that the number of properties available to rent has decreased," RICS spokesperson Jeremy Leaf said.
"This is a clear sign that the accidental landlords are returning to the sales market. If demand remains strong, which it is likely to as many first time buyers are still finding themselves priced out of the housing market, then rents should continue to rise as would be tenants compete for fewer properties."
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