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Rents fall but stability predicted

Rents fall but stability predicted

Category: Money

Updated: 23/06/2009
First Published: 23/06/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Rents dropped across the residential lettings sector in the first three months of 2009 but expectations are that the trend is set to moderate, according to the Royal Institution of Chartered Surveyors (RICS).

While the net balance of surveyors reporting falls rather than rises in rents slumped to its lowest level since the series was introduced in 1999, rental expectations, despite remaining negative, improved markedly.

Just one in four surveyors said they were anticipating future rental declines rather than increases. In the previous three month period that figure was 41 per cent.

Tenant demand for rental property also continued to increase, albeit at a slower pace than previously reported.

The rental markets in London and Scotland are continuing to favour tenants, as 85 per cent of chartered surveyors reported a rise rather than a fall in the capital, and 80 per cent reporting the same trend north of the border.

There is some evidence that the tentative signs of recovery in the mortgage market is filtering through to landlords. Almost two per cent said they would consider selling their property at the expiry of their tenant lease. When asked the same question in the three months to January this year, just 0.2 per cent said they would consider such a move.

"Demand for rental property is still high but tenants have been able to take advantage of a flooded market to negotiate lower deals," said RICS spokesperson Jeremy Leaf.

"Even so, the downward pressure on rents should ease in the coming months providing some good news for landlords."

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