Region’s rental market picks up pace

THE number of landlords renting out premises increased in Yorkshire during the second quarter of 2008, according to research by the Royal Institute of Chartered Surveyors.

The RICS Lettings Survey said the rental market across the country boomed as housing sales in July diminished.

New instructions to let increased at the fastest rate in the survey’s history as many would-be-sellers found that becoming a landlord was a better option than selling in the current climate, with the North of England, including Yorkshire and the Humber, reporting one of the strongest pick ups in the country.

Overall, 43% more chartered surveyors reported a rise rather than a fall in landlord instructions compared to 35% in the previous quarter.

New instructions to let houses and flats increased at the fastest pace in the survey’s history with 47% and 39% more chartered surveyors reporting a rise than a fall respectively.

Surveyors reported that frustrated vendors have placed their property in the market to let as they have been unable to agree sales due to a lack of demand in the housing market.

However, in Yorkshire and the Humber the reported figures were above the survey’s average rate with 48% more chartered surveyors indicating a rise than a fall in landlord instructions, in comparison to 37% the previous quarter. 

Nationally, 37% more chartered surveyors reported a rise than a fall in tenant lettings, up from 30% in the last quarter. Significantly, demand for family homes remains stronger than for flats.

Again, the region showed one of the strongest growths in tenant demand with 57% more chartered surveyors in the region reported a rise than a fall compared to 38% during the previous three months.

The survey revealed that the proportion of landlords opting to sell at the expiry of the tenant lease fell to 2.1, the lowest level on record, down from 4.2%.

Rental expectations fell slightly with some surveyors expecting over-supply to push rents downwards in the next quarter.

Edward Waterson, of Carter Jonas, who is RICS’ spokesman for Yorkshire and the Humber, said: “Rental values right across the board have shown remarkable strength since the start of the year. This is particularly apparent in larger houses which previous owner occupiers are looking for. 

“Vendors are also thinking about letting their properties if they are finding it difficult to or are unable to sell.”

National RICS spokesman James Scott-Lee added: “The lettings market is booming with many vendors opting to rent their property while sales in the housing market continue to dry up. Many are willing to ‘hold’ and await the return of capital appreciation.

“Becoming a landlord is now an increasingly profitable option with rising rents and yields offering good returns. Established investors have been reaping the benefits of the housing downturn for sometime and will continue to do so in the short term. However, ever increasing supply could have an impact on rental growth as tenant options increase.”