Rics: Residential lettings market to perform well in 2012
Posted by Sue Hopson
UK property investment is likely to continue to be an attractive proposition in 2012 thanks to rising demand and increased rents, the Royal Institution of Chartered Surveyors (Rics) has suggested.
According to the organisation's housing market forecast for 2012, while the owner occupier sector is set to remain subdued, the residential lettings market will continue to perform well throughout the year.
Rics noted that demand for rental properties remained strong over the course of 2011 due to many would-be first-time buyers being unable to access the sales market and this is something that looks set to continue over the coming twelve months.
However, it also said that the gap between demand and supply is shrinking, suggesting that the increase in rental values may begin to slow as the year wears on, meaning it could be a good idea for buy-to-let investors to act quickly.
In contrast, the owner occupier market will continue to see low levels of transactions and stagnated house prices, predicted Rics.
Transaction levels are likely to see a slight rise next year and climb back to around 880,000, but still only around 50 per cent of the levels seen before the recession.
But house prices will continue to decline, with Rics forecasting an average fall of three per cent across the UK over the course of 2012.
This could lead to even more people turning to the lettings market, boosting demand and in turn rental incomes.
"Transaction levels should see a slight increase, although mortgage lending is likely to remain subdued which will limit the scope for improvement," said Rics chief economist Simon Rubinsohn.
"As a result of this, the lettings market will remain firm which means that rents are likely to increase further, albeit at a slower pace than in 2011."
Social media