Lettings still strong in region - survey
CAROLINE CULOT While recent rises in interest rates have seen a tempering of the buy-to-let industry nationwide, a new survey shows that tenant demand and new instructions have continued to increase in the Eastern counties.
While recent rises in interest rates have seen a tempering of the buy-to-let industry nationwide, a new survey shows that tenant demand and new instructions have continued to increase in the Eastern counties.
Instructions to let property across the UK rose at the slowest pace since the second quarter of 2005 and gross yields fell for the first time in two years as house price rises accelerated, the Royal Institution of Chartered Surveyors survey stated.
However, a strong labour market and migration kept tenant demand rising firmly, particularly in the Eastern region. And surveyors expect rental levels to rise further, though confidence has edged back slightly after reaching record levels.
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In the Eastern region, tenant demand for the three months to October strengthened for the second consecutive quarter and approached the rapid pace recorded in the first quarter.
Landlord instructions increased at above the long-run average after two consecutive quarters of modest rises.
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Rental levels also continued to increase firmly, although the pace slowed compared to last quarter as housing rents moderated.
Gross yields remained stable for the second consecutive quarter and house yields rose moderately while apartment yields fell moderately.
The survey stated the average rent for a one-bedroom flat in Britain was £593 per calendar month while a two-bedroom flat was £727. The highest rents were paid in London and the South East with the next highest being the Eastern region and the South West.Graham Thompson, managing director of Norwich-based lettings agent Sapey & Co, said: “There is considerable growth in the Norwich property market and since January 2006 the demand for properties to rent in the city far exceeds the supply.
“At the present moment of time there are not enough houses or flats being built for the private buying sector. As it becomes increasingly apparent that state pensions will not afford an acceptable way of life, buy-to-lets are becoming that pension for the future.
“With the year drawing to a close, 2006 has again shown that growth in residential investment continues to go from strength to strength.”
In the survey, local agents were also quoted with Trefor Jackson, Brown & Co in Fakenham, saying: “The market remains firm for properties up to £600 per calendar month. The good-quality larger properties are proving a little more difficult to let at present.”
And Nigel Morgan, of Watsons Residential in North Walsham, said: “The focus of demand has moved away from flats to houses. Converted flats can be slow to let unless immaculate; by contrast, we let all of the eight new three-bed houses recently bought by a client off plan as soon as each unit was completed.”