An analysis of the latest figures shows that demand for rented residential property is increasing fast. And the trend is likely to continue as first time buyers are leaving it later and later to get onto the property ladder.
According to the Royal Institution of Chartered Surveyors tenant demand for residential property in the three months to April increased at the fastest pace since July 2007.
A spokesman said this is directly liked to the wider turmoil created by the credit crunch. 'The sales market's loss is the lettings market's gain, said James Scott-Lee. 'Some would-be sellers are retreating from selling and letting or re-letting their properties as they wait for mortgage lenders to offer buyers more favourable lending criteria,' he added.
The proportion of new lettings to private individuals increased to 83.9% – which is the highest in the survey's history.
Gross yields also increased at their fastest pace in the survey's history, with yields increasing substantially faster on houses than flats. 'With rental expectations high, landlords will continue to enjoy this increasingly lucrative market,' concluded Mr Scott-Lee.
The trend is confirmed by other statistics. Demand for rented property in the UK market increased by 41% in May, when compared to the same month of 2007, according to findings from letting agent Your Move.
Tenant demand increased month on month in May, with the number of leases commencing during the month rising 14% when compared to April. 'Mortgage finance is hard to come by these days and the rental market is definitely picking up the slack,' said managing director of Your Move estate agents, David Newnes.
'Buy-to-let will grow this year. Opportunities to invest are ripe for professional landlords able to secure financing,' concluded Mr Newnes.
However rental prices are coming down in certain areas according to the Association of Residential Letting Agents but this appears to be due to corrections in the market place where prices have been too high rather than a trend.
'We are seeing corrections in individual locations throughout the country,' said Ian Potter, head of operations for ARLA. 'However, demand for property still outstrips supply in some areas,' he added.
Rental yields in May increased to their highest level since the start of 2006, according to Paragon Mortgages' buy-to-let index. The average landlord can now expect an average yield of 6.4%. Rental incomes have increased steadily over the past year – rising nearly 12% over the past twelve months and six per cent over the past six months.
The numbers of tenants is not going to dwindle according to a survey by SmartNewHomes.com. It found that the vast majority of Brits are resigned to not owning property until well into their 30s, with just 18% expecting to make a home purchase in their 20s. A further 7% expect to never own their own home.
