The West Midlands lettings market is booming as a slumping housing market forces would-be sellers to rent properties, according to a survey.
The latest RICS Lettings Survey found 53 per cent more chartered surveyors reported a rise than a fall in landlord instructions.
The figures for the three months to July, which jumped from 28 per cent in the quarter ended April, represent a survey high.
Across the UK, 43 per cent more chartered surveyors reported a rise than a fall, compared to 35 per cent the previous quarter.
Surveyors said frustrated vendors, unable to agree sales due to a lack of demand in the housing market, have been placing their property on the lettings market instead.
Thirty five per cent more chartered surveyors reported a rise than a fall in tenant lettings in the West Midlands, down slightly from 39 per cent in the last quarter, as many would-be buyers have been forced to rent as the route to mortgage finance has been blocked.
RICS West Midlands spokesperson and divisional development director at Persimmon Homes Richard Franklin said: “The close alignment of the increases in supply and demand of properties to let in the region bodes well for a sustainable market moving forward.
“Rental inflation looks set to reduce towards the end of the year and with little evidence of the banks easing lending criteria, the rental sector is likely to remain the beacon for the foreseeable future.”
The survey’s findings are reflected by lettings agents across Birmingham.
Nigel Hodges, lettings manager at the Kings Heath branch estate agent Glovers, said: “The lettings market is very buoyant at the moment – we’ve had quite a few instructions from people who can’t sell their houses looking to let instead.
“Some people look at renting if they can’t afford to accept a lower offer for their property, so they rent instead and wait for the market to come back. Properties are letting quite quickly as people still need somewhere to live.”
Birmingham city centre lettings agents also report an upbeat market. Ben Evans, lettings manager at FleetMilne Residential, said: “The market is absolutely buoyant at the moment, but it always is at this time of year.
“But also the negativity around the selling market is having a knock-on effect.
“Demand has gone through the roof and we are just noticing that prices are started to nudge up.
“For example, we have had two or three interested parties fighting over the same properties and landlords have been able to achieve their asking price.”
Mr Evans said he had noticed an undersupply of certain categories of rental properties with parking facilities, for example one-bedroom flats with in the £650 bracket or two bedrooms in the £750-900 price range.
“There aren’t enough of these types of properties available at the moment,” he added.
“Parking is a bigger issue than people think, and there are more flats available without parking.”
Mr Evans pointed to the downturn in the buy-to-let market as a factor in keeping rental prices up.
“It’s almost a sliding scale – the number of tenants is increasing and the number of properties being supplied to the market is decreasing as people are not buying to let any more.”
Meanwhile, savings group Skandia said the amount of privately rented accommodation in Britain is likely to shrink by about two-thirds in the next few years as more investors pile out of the buy-to-let market.
Skandia said a combination of falling house prices, higher debt costs and sluggish rental growth would lead to more landlords selling their properties.
Skandia UK chief executive Nick Poyntz-Wright said: “Higher mortgage rates and falling property prices will cause investors to reconsider their exposure to residential property and many will choose a more diversified approach.’’