The rental market rose as the number of house sales fell, according to the RICS Lettings Survey for July.

New instructions to let (an indicator of supply) increased at the fastest pace in the survey's history as many would-be-sellers opt to let rather than sell their property. New instructions to let houses and flats increased at the fastest pace in the survey's history with 47 percent more chartered surveyors reporting a rise. Surveyors report that frustrated vendors are letting after struggling to sell their homes.

Demand for family homes

RICS (Royal Institution of Chartered Surveyors) report that demand for family homes remains stronger than apartments.
They say many would be buyers have been forced to rent as the route to mortgage finance has been blocked.

Rents may fall

Rents continued to rise in July, say RICS, while house prices fell, driving gross yields upwards. Rising profits have kept landlords committed to the market and the proportion of landlords opting to sell at the expiry of a tenant lease fell to 2.1, the lowest level on record.  But rental expectations fell slightly with some surveyors expecting over-supply to push rents downwards in the next quarter.

Accidental landlords

RICS spokesperson James Scott-Lee said:  "The lettings market is booming with many vendors opting to rent their property while sales in the housing market continue to dry up. "Many are willing to hold and await the return of capital appreciation. Becoming a landlord is now an increasingly profitable option with rising rents and yields offering good returns. He added: "Established investors have been reaping the benefits of the housing downturn for sometime and will continue to do so in the short term. However, ever increasing supply could have an impact on rental growth as tenant options increase."