Low mortgage availability leading to increased lettings activity, says RICS
The continued lacklustre growth in mortgage lending is leading to increased activity for residential lettings agents, the Royal Institution of Chartered Surveyors (RICS) has said.
Last week, figures released by the British Bankers' Association (BBA) revealed that mortgage lending by Britain's high street banks is still significantly subdued.
The annual growth of the banks' net mortgage lending was 2.2 per cent in April year-on year, said the organisation.
However, gross mortgage lending during the month was unchanged over the recent six month average but five per cent lower than gross lending in April 2010, falling to £7.9 billion.
Commenting on the figures, RICS said that the difficulty for potential housebuyers in securing a mortgage means that a higher number are turning to the rental sector.
"Critically, the low level of transactions in the sales market is resulting in more activity in the private lettings markets where rents are continuing to increase as demand outstrips supply," said Simon Rubinsohn, chief economist at RICS.
He also disagreed with the BBA's assertion that lending is subdued due to a lack of demand, rather than a lack of availability.
"The BBA highlights a lack of demand for mortgages as a key factor influencing the level of approvals at the present time. We would not disagree that it is one factor but the cost and availability of finance for first time buyers remains the bigger problem in our view," Mr Rubinsohn said.
It follows a survey by moneysupermarket.com which found that the difficulty of securing a mortgage and raising the money for a deposit means approximately six million non-homeowning British adults (31 per cent) do not intend to buy a property at any point.
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