The cost of renting a home in the North West has risen by nearly 7% in the last year as many would-be buyers continue to find themselves locked out of the sales market, says the latest RICS residential lettings survey (May–July 2012).
The cost of renting a property in the North West of England has grown by 6.9% over the last 12 months, according to chartered surveyors across the North West. Given the problems affecting the sales market, perhaps unsurprisingly, this trend looks set to continue as respondents also predict rents to continue to grow by more than 5% (5.1) over the next year.
The upward march in rents in the area continues to be underpinned by a shortage of good quality properties for tenants to move into. In the three months to July, the amount of new properties coming on to the market dropped with 18% more surveyors reporting falls in new instructions to market.
Meanwhile, demand continues to grow in the North West, albeit at a much slower pace than in recent quarters, as 14% more respondents reported rises rather than falls in interest from potential tenants (from +19%). Significantly, the increase demand has outpaced the change in supply for a second consecutive month this year.
Across the country, strong regional variations were apparent. The North East saw rents increase by 4.4%, whilst rents only grew by 2.5% in Yorkshire and Humberside, whereas Wales reported that rents had in fact stayed at the same level over the last 12 months.
Unsurprisingly, with rental values steadily increasing, gross yields have continued to edge upwards during the early part of the year, which has contributed to fewer landlords (4.2%) opting to sell their properties at the end of the tenancy.
RICS North West spokesperson, John Halman of Gascoigne Halman estate agents says: “Tenant interest is still riding high and so far they have been prepared to meet the higher rents being sought by landlords”
He adds: “The lack of available mortgage finance and the large deposits required by lenders are barriers, which are causing many ‘would-be’ buyers to have no other option, but to continue to rent. These obstacles need to be addressed alongside the shortage of new stock coming to the market.”