Rents rose further in the three months to April, as fresh tenant demand continued to exceed new instructions, according to the latest RICS Residential Lettings Survey.
The survey, which covers the period February – April 2012, found that 13% more chartered surveyors reported rents rose rather than fell in the three months to April.
This growth was largely driven by increasing demand as a net balance of 15% more respondents reported rises in prospective tenants, with houses in greater demand than flats.
Rental values in the UK have now grown consistently since 2009 as the problem of unaffordable mortgage finance and large deposits required by lenders remain a barrier to home ownership, with many potential buyers forced to turn to the rental market.
Supply of property to the market continues to grow, albeit at a slower pace, with 7% more surveyors reporting increases rather than decreases in landlords looking to let their properties.
With rental values steadily increasing, landlords’ gross yields also continued to grow during the early part of the year, although the pace of growth has begun to slow. This was the case in every part of the UK with the exception of London where tenant demand also saw a slight downturn.
Surveyors remain positive that the market will remain buoyant over the next three months, with 13% more predicting rents will rise rather than fall.
Across the UK, all areas expect rents to continue to increase with the exception of Scotland where expectations entered negative territory for the first time since October 2009.
“The rental market is still fairly buoyant and this looks likely to continue, given the challenges facing the sales market,’ said Peter Bolton King, RICS global residential director.
“Indeed, mortgage finance may become even harder to access particularly for first-time buyers if the euro crisis continues to deepen.
“This points to tenant demand continuing to outpace supply. As a result, rents will remain on an upward trajectory, adding to the pressure on many households whose incomes are already being squeezed.”