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13 August 2012

Rents up over 4% on the year

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by Gill Montia

Rents up over 4% on the year

The cost of renting a home in the UK has risen by 4.3% in the last year, according to the latest residential lettings survey from the Royal Institution of Chartered Surveyors (RICS).

Across the country, strong regional variations were apparent, with the North West seeing the sharpest annual increase (6.9%) while surveyors in Wales reported that rents had remained level.

Given the number of would-be home buyers locked out of the housing market by a lack of mortgage finance and demands for high deposits, respondents to the survey are expecting a similar rise (3.9%) over the next 12 months.

According to the RICS, the upward march in rents is also underpinned by a shortage of good quality properties for tenants to move into – in the three months to July, more surveyors reported falls in new letting instructions that rises but demand continued to grow, albeit at a slower pace than recently.

Unsurprisingly, gross yields continued to edge up during the early part of 2012, leaving only 3.3% of landlords questioned opting to sell their properties at the end of the tenancy.

The RICS’s global residential director, Peter Bolton King, comments: “While tenant interest is still riding high, what remains to be seen is whether many are willing to meet the increasing rents being demanded by landlords.”

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