Insurance News Archive

Investors choosing to rent rather than sell

Many investors are choosing to rent out rather than sell properties in the current economic climate, it has been revealed.

They are taking advantage of rising rental yields, while there has been a significant drop in demand for buying properties, according to the Royal Institute of Chartered Surveyors (RICS).

Landlords are said to be reaping the rewards of the collapse of demand in the housing market, with 23 per cent more surveyors reporting a rise in gross yields in the first three months of the year, up from five per cent in the previous quarter.

James Scott-Lee, a spokesman for RICS, said the letting market is gaining while proprietors wait for mortgage lenders to offer more favourable rates.

He continued: "While transaction numbers in the sales market are weak, many are taking advantage of rising rents and yields in the private lettings sector.

"With rental expectations high, landlords will continue to enjoy this increasingly lucrative market."

Average rent in the UK has risen by 14 per cent in a year, breaking the £1,000 per month barrier in March.

22 May 2008