Published on : Tue, 29 Nov 2005 13:52GMT
by : Lucy Andrews

Many house owners are now more reluctant to sell their properties than before. They are viewing their properties as a long-term pension investment, and therefore want to rent them. This is a consequence of UK’s pensions’ crisis, according to the Royal Institution of Chartered Surveyors (Rics).

Jeremy Leaf, spokesperson for Rics said: “The strength of the market is demonstrated by the fact there has been no significant investor exodus in the past year, despite shrinking returns as house price rises stall.”

Also endorsing this fact is the finding of Rics, which says that tenant demand for rental property has touched its peak since January 2004. Around 23 per cent of surveyors reported a rise in demand for renting as against a 20 per cent rise in the previous quarter.

With the house prices rising negligibly, rent levels have shown an increase for the tenth successive quarter.

According to Rics, only four per cent of landlords are putting up their buy to let properties for sale when tenancies expire. This is half of the level over the same period last year.

A "take a 'wait and see' approach to the housing market" is also deterring many potential homebuyers, it is opined.

Rics also states: “Growth in landlord activity has been subdued over the past 18 months as a result of higher interest rates in 2004 and the end of strong house price inflation.”

According to Rics, factors contributing to tenant demand include increased employment levels and sustained demand from first time buyers who are yet to get a toehold in the real-estate market. Immigration into the UK from the recently accessed eastern European States is also considered to be a driver.

The average monthly rent as of now stands at £753 with prices being at their highest in London, eastern England and the south-east, while Wales reported lowest rentals.