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Rents fall but are 'starting to stabilise'

Tuesday 23rd June 2009

Rental yields for buy-to-let landlords have continued to fall but the trend will not continue in the long-term, it has been claimed.

According to the Royal Institution of Chartered Surveyors (Rics), Scotland was worst hit by falls in rent , with 80 per cent of agents claiming that yields had fallen in the past month – compared with 58 per cent in its previous report.

In the capital 85 per cent of agents noted that rents had fallen rather than risen.

Rics claims that the results from its latest survey show that rent is declining faster than property prices in some areas.

RICS spokesperson Jeremy Leaf, said: "Property transactions are starting to rise from very low levels and the influx of supply in the rental market has slowed as vendors begin to find buyers.

"Demand for rental property is still high but tenants have been able to take advantage of a flooded market to negotiate lower deals."

But with the selling and asking prices in the sales market converging – perhaps the rental market will just have to accept lower income in the near future.

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Posted By John Levett on Tuesday 23rd June 2009 14:10:31

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Agents should be trying innovative methods of marketing properties rather than falling back on slashing the price. Landlords should be looking to maximise their yields during these tough times. By reducing the deposit or using a bond the property suddenly becomes much more desirable if the tenant can keep their cash.

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