The Royal Institute of Chartered Surveyors is forecasting strong demand for rental property next yea...
The Royal Institute of Chartered Surveyors is forecasting strong demand for rental property next year, which is likely to provide support for continued house price inflation.
The forecast contradicts yesterday's Hometrack monthly house price survey showing deflation in the more expensive parts of London and predicting a big fall in London house prices next year.
RICS says demand for private rental property is being driven by the increasing number of people unable to get on the property ladder at current prices.
Rents have fallen over the past three quarters, particularly in London, and are expected by the majority of RICS members to continue falling in the last quarter of the year because supply of rental properties is still good.
However, demand is forecast to rise as people put off buying property in the hope prices may fall over the next year.
RICS says its members are starting to see increasing demand for their services in the rental market.
Whether property prices will actually fall next year is being increasingly debated following the statement last week by Bank of England Monetary Policy Committee member Kate Barker, who predicted that house price inflation would fall to zero by 2004.
RICS says it disagrees, currently forecasting inflation of between 10% to 15% for 2003 and saying that forecasting house price inflation more than 12 months in advance is an impossible task.
Hometrack's survey is notable for its reversion of previous expectations for house prices to rise by up to 7% in London next year: instead it now says they could fall by up to 5% as the job losses in the City start to bite in the property market.
Still, the same survey predicts house prices nationwide will rise 4% next year, and they are still rising nearly 0.5% monthly in most regions outside the capital and Southeast.
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