The Royal Institution for Chartered Surveyors’ (RICS) has found that Britain’s buy-to-let market has come to a standstill owing to the potential of higher interest rates and high or over valued property prices.
RICS spokesman, Jeremy Leaf said, "Poor prospects on return and capital growth are keeping new investors out of the buy-to-let market although continuing healthy tenant demand means existing landlords are holding firm. Another reason why investors are holding on to their residential real estate may be imminent changes to pension rules in April 2006. After this, residential property can be included in personal pension funds for the first time."
The Residential Lettings Survey discovered that number of buy-to-let investors entering the market has dropped to an all-time low, but there has been an increase in rental returns for the first time since 2000. The survey also found that there was no panic at these figures, the number of people who already own properties have not put them up for sale at the end of a tenancy agreement.
There has also been an increase on tenant demand plus rents have shown a moderate increase. According to the survey report, the average rent during the month of April was £743. A one bedroom flat cost about £554 a month, while a four-bedroom detached home fetched an average rent of £1,195.
The highest rates were in London and the Southeast while the lowest were in Wales. The survey added that there was an increase in the rents around the country, Terry Kimmitt from Interlet Letting Agents in Peterlee, County Durham, said: "Low unemployment in the Peterlee area and a shortage of private rented housing is forcing rent increases." But Mr. Leaf cautioned, “As always investors should be cautious and consult a professional adviser or they risk getting caught out.”
Posted
on : Mon, 30 May 2005 19:15 GMT | Mortgages News
By : Chris Rowe
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