Reduced demand for flats

Posted 2007-12-18

Although a slowing housing market has encouraged rental growth, the demand has fallen away from flats due to oversupply, the Royal Institution of Chartered Surveyors (Rics) revealed today. 

The latest data from the Rics quarterly Letting Survey shows that the demand for houses has risen 25.2% since the last quarter, while the demand for flats has dropped by 20%.

This is good news for landlords, who are riding the wave of demand in relative comfort, with gains from rising rents offsetting the erratic market.

However, the survey also warned of some uncertainty for landlords in the future as tightening lending criteria and successive interest rate hikes begin to hit the buy-to-let market.

Meanwhile, those hoping to invest in real estate are increasingly discouraged by the lack of incentives and the unstable property market. 

Jeremy Leaf, spokesman for Rics, commented: “With rents still on the increase, many would-be buyers will find accessing the housing market even more difficult as they struggle to raise the capital for that first important purchase.”

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