A press release from the Royal Institution of Chartered Surveyors reports that strong tenant demand and falling supply has pushed rental prices higher.
The Residential Letting Survey for Nov 2010 - Jan 2011 from RICS says that rents rose at a rapid pace in the three months to the end of January, as falling supply of rental properties and strong tenant demand continued to drive prices upwards.
40% more chartered surveyors reported rents rose rather than fell in the three months to January, which is the highest positive reading in the survey's history. As rents increased, gross rental yeilds have also risen sharply - they have now increased in each of the last four surveys.
Continued difficulty in securing mortgage finance and large deposits required by lenders remain a barrier to home ownership. As a result, many have turned to the rental market and tenant demand has grown rapidly since late 2009. In the latest survey, 32% more surveyors reported seeing a rise rather than fall in demand, which houses more in demand than flats.