Tenants drive down rental amounts
24/03/2009 - Supply and demand could end rent negotiations
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A recent survey by the Royal Institution of Surveyors (RICS) has revealed that tenants are making the most of the oversupply of rentable properties on the market and forcing rental costs down.
The increase in rental properties is partly fuelled by home owners, property developers and house builders renting properties if they are experiencing problems in selling them in the current difficult climate.
The RICS survey found that rental amounts have fallen the sharpest since it began conducting the survey in 1998. A total of 48 per cent more surveyors reported a fall in rents than in increase. The survey showed that the supply of rental homes in London had grown by 67% in the past year and the demand had increased by 20 per cent year on year.
Rents in London had fallen by 6.9 per cent since March 2008 and by 1.1 per cent in the past month alone. The North of England has witnessed a decline in rental yields of more than 13 per cent.
Estate agents have found that properties that rent for more than £1000 per week are hanging around the longest before being taken up; many companies taking out leases for their staff have stopped doing so causing a 30 per cent fall in this niche market. The demand for rental property is growing at double the average rate as first time buyers continue to struggle to secure mortgage loans.
