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RICS: residential rents may be set to rise

The latest RICS residential lettings survey said the supply of new property coming onto the rental market has fallen for the second consecutive quarter.

The survey said the supply of new properties coming on to the rental market has fallen for the second consecutive quarter, possibly bringing an end to the downward trend in rents that has been in place since the autumn of 2008.

While the net balance of chartered surveyors reporting rising rather than falling rents in the three months to January 2010 was zero, this is positive as it follows five quarters of negative readings.

This announcement is in stark contrast to April last year, when 58 per cent more chartered surveyors were reporting falling rents, an all-time low for the survey

In a positive nod to landlords, 33 per cent of respondents said they expect rents to increase over the coming quarter. This compares to 22 per cent in the last survey.

RICS is attributing the more positive rental outlook to the continued decline in supply of both flats and houses in the marketplace. It said 23 per cent more chartered surveyors reported a fall rather than a rise in the number of new landlord instructions for this period, up from 18 per cent in the previous quarter.

RICS spokesperson Jeremy Leaf said: ““It is becoming clear that movements in the housing market are affecting lettings: the RICS housing survey has seen a steady increase in the number of new instructions coming on to the market over the past few months, whilst simultaneously we see with this survey that the number of properties available to rent has decreased.”