Sellers 'turning to rental market'

A growing number of people wanting to sell their properties are turning to the rental market until the current credit squeeze comes to an end.

The global credit crunch and the recent economic slowdown have affected house prices and made it more difficult for buyers to secure mortgages, causing many sellers to turn to the residential lettings market.

According to the Royal Institution of Chartered Surveyors (Rics) landlords have witnessed a sharp increase in property yields in recent months, with gross yields soaring to record levels.

The latest Rics residential lettings survey shows that 23 per cent more chartered surveyors reported an increase in yields over the first quarter of 2008, up from just five per cent the previous quarter.

James Scott-Lee, a spokesperson for Rics, commented: "While transaction numbers in the sales market are weak, many are taking advantage of rising rents and yields in the private lettings sector. With rental expectations high, landlords will continue to enjoy this increasingly lucrative market."

Rics has also recorded a steep increase in new instructions for rental properties during the first quarter of this year, with new instructions up to 29 per cent over the three months, a substantial increase from -2 per cent in the fourth quarter of 2007.

The Association of Residential Letting Agents (Arla) has called for greater support and financial incentives for buy to let landlords in the wake of a report by the Commons communities and local government committee highlighting the need for more residential rental properties to address UK housing shortages.


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