Demands for lettings has recently increased at the fastest pace since the end of 2008. This is despite the number of new rental instructions being brought to the rental market place.The surveyors trade body, the Royal Institution of Chartered Surveyors (RICS), has published its latest report, which shows that 33% more surveyors are seeing an increase in demand for rentals than those that report a fall.
But at the same time the report states that new landlord instructions have fallen for the fifth successive quarter.
This picture of demand over supply has put upward pressure on rent prices and 39% more surveyors see rising rents prices than those that do not. 34% of surveyors expect rents to continue to rise over the next quarter. As house prices continue to weaken gross yields have therefore been rising across the board.
The fewer number of new landlord instructions has been offset to some degree by the number of landlords not selling their house at the end of the tenancy agreement. The proportion of landlords intending to do this has fallen from 4.1% in Q2 to just 2.5% in Q3 where the survey average is 4.4%.
With new landlord instructions for flats falling a a lower pace than those for houses and demand from prospective tenants for houses also rising the RICS report points to a divergence of rents. "The expectation is that rents for houses will increase at a greater rate than those for flats."
On a 'market share' basis, the proportion of lettings to private individuals slipped 4% down to 69% while students and companies picked up the slack.
With more people being forced to rent and house prices slipping someone taking on a new tenancy agreement may well want to look at negotiating a property lease option into the deal. This could well get them on the first rung of the housing ladder whatever their financial position and keep their rent under control.
The use of lease options may also help free the market up for estate and letting agents alike also allowing them to pick up their fee into the bargain.
With the mortgage market in a bit of a tail spin some other means has to be found to get property moving again and lease options do offer an alternative method of doing just that. Property more freely changing hands will allow more workforce and business mobility thereby helping the economy recover.