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UK rents expected to continue rising in all regions, says RICS

The organisations says that rent expectations remain in positive territory and this has been the case since the middle of 2009 and it predicts that on average, rents are expected to rise by close to 2% over the next 12 months.

Although there have been some reports that rents are beginning to stabilise in parts of the country RICS points out that its measure of sentiment tells a rather different story with rents projected to continue rising in all regions to a greater or lesser extent.

The survey was conducted ahead of the Budget announcement introducing the Help to Buy initiative and TICS points out that it not only extended the existing shared equity scheme for new build property but also held out the promise of a more all embracing mortgage guarantee to take effect from the beginning of next year.

‘While the rental market remains buoyant at present, it will be interesting to see whether Help to Buy begins to encourage some tenants back to the owner occupier market as more higher loan to value mortgages become available,’ said Simon Rubinsohn, RICS chief economist.

‘Even if that proves to be the case, however, it is improbable that we will see much evidence of this before 2014,’ he added.
Meanwhile, the latest market report from West End estate agency LDF shows that central London is experiencing a strong rental market so far in 2013. The number of residential lets have increased by 110% in the first quarter of the year compared with the first three months of 2012.

‘It’s encouraging to see an increase in the number of lets, however, rents are currently 3.63% below last year and in some cases, 6% below the highs of 2008, with tenants paying an average of £502 per week,’ said lettings manager Javier Carrillo.

‘This can only be attributed to the fact that supply is now outweighing demand, and unless landlords ensure their properties are presented in immaculate condition, as well as being realistically priced, they will not attract tenants,’ he added.

The firm has found there are slightly fewer tenants from abroad which it puts down to fewer foreign students opting to study in London this year and the fact that some banks are recruiting fewer workers from overseas.

As UK tenants are often forced out of the central London market due to high prices paid by foreign tenants, this means that more of them can afford to rent in this part of the city.

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