Homeowners finding it difficult to sell their property in the current market are increasingly choosing to let their home, according to the Royal Institute of Chartered Surveyors (RICS).
RICS says rising rental yields and a lack of buyers in the housing market have caused many homeowners to try and ride out the credit crunch by letting their property.
RICS' latest survey shows 29% more surveyors reported a rise in new landlord instructions than a fall in the first quarter of 2008, compared to 2% drop in the last three months of 2007.
The fall in buyers has resulted in increased demand in the rental market, with 23% more chartered surveyors reporting a rise in gross yields, compared with 5% at the end of 2007.
James Scott-Lee, spokeman for RICS, says: “The sales market's loss is the lettings market's gain. Some would-be sellers are retreating from selling and letting or re-letting their properties as they wait for mortgage lenders to offer buyers more favourable lending criteria.
“While transaction numbers in the sales market are weak, many are taking advantage of rising rents and yields in the private lettings sector.”
RICS figures also show the proportion of landlords selling their properties has fallen, down from 4.6% to 4.2%.
Scott-Lee says high rental expectations mean fears of landlords offloading properties once capital gains tax changed are unlikely to be realised.
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