The Royal Institution of Chartered Surveyors (RICS) has found that the current over supply of properties available to rent on the market is putting tenants in a better bargaining position as regards rents, according to a report in The Times.
Many home owners who wish to sell up are biding their time in the hope that house prices will increase in the coming months. In the meantime they are looking to rent out their properties
Prospective tenants are realising their opportunity to secure lower rents.
There is currently a large number of other properties on the market owned by property developers and house builders that are not being sold and are therefore being made available to the rental market. This section constitutes 10 per cent of new property sellers, an increase of 2 per cent from October last year.
According to the estate agent Knight Frank, the availability of homes for sale in London rose to 67 per cent during last year.
Properties with rents over ?1,000 have been difficult to let. With the fall in the number of firms taking leases for their employees, there has been a reduction of up to 30 per cent in rent.
Nevertheless the survey indicates that demand for rental property is accelerating. This is partly due to newcomers on the market being unable to access finance to enable them to buy.
A spokesperson for estate agents Savills said: ?The bottom end of the market is very lively indeed. Renters looking to negotiate on anything below ?500 a week will get a bit of a shock. One of the biggest reasons for oversupply was the surge of downsizing domestic tenants – people who chose to let out their property and rent elsewhere while it was cheap. But those properties have now been rented and in some areas not much is coming in to replace them.?
All this means that rents could be set to increase due to supply not keeping up with demand, said estate agents.
