Surge in residential property rents Rents on residential property are rising strongly as potential first-time buyers struggle to get on the housing ladder, judging by a survey by the Royal Institute of Chartered Surveyors.
Estate agents reported the fastest rental rise on record in the third quarter of 2007 and for the second quarter in succession. This coincided with the rise in tenant demand increasing on average by over 27% during 2007. There is no doubt that geographical differences occur, with large rental demands in the London and south compared to other parts of the UK. But if we all remember the ripple effect, then once again since history has a remarkable way of repeating itself, it will be little wonder if rents in other parts of the UK do not begin to rise during 2008.
We can easily remember when rents where decreasing back in 2002 and 2003, which coincided with big capital gains in property. Since we were looking at lower capital gains in property within London during 2006 and 2007, you have seen that in some boroughs, tenants have to pay up to 12% more in rent than a year ago. Little thought then that this ripple will spill out across the UK. |
