RICS

A shortage of new homes coming onto the market is a main driver for booming rental prices, as more people are forced into rental accommodation, according to a new RICS Residential Lettings Survey released today.

Tenant demand is soaring as more people are priced out of the housing market, due to high property prices, caused in part by a lack of new build homes in relation to demand, and a lull in mortgage lending.

The volume of homes in Scotland sold increased last month, while the number of prospective purchasers enquiring about property for sale rose sharply for the second month in succession which showed there was more activity in the Scottish housing market, according to the latest RICS Housing Market Survey.

Falling supply of new homes to the rental market coupled with greater demand, makes now a great time to enter the buy-to-let market.

The latest Buy-to-let index from LSL Property Services plc shows that rents increased for the 10th consecutive month in November, with the average UK rent at £692 per month.

With housebuilding levels at an historical low there is a well publicised need for many more new build homes in this country, including extra affordable homes, to help cope with a rising population and demand for homes to both rent and buy.

More chartered surveyors questioned for the October RICS UK Housing Market Survey reported falling rather than rising residential property prices in October, largely due to a fall in demand for homes to buy, caused mainly by a continued lack of mortgage finance.

Chartered Surveyors' sentiment over residential property prices continues to worsen, with 49% more surveyors reporting prices fell rather than rose in October - the lowest reading since April 2009.

Many people wishing to buy a new home are still being denied the mortgage finance they need, as lending conditions remain tight.

Figures released by the Bank of England today shows that mortgage borrowing levels remained weak last month.

The volume of residential property mortgages approved fell to a six-month low last month reflecting lower activity in the housing market, according to fresh data released by the Bank of England.

A total of 47,372 mortgage applications were approved for property purchases in August, down from 48,346 in July - the fourth consecutive monthly fall.

The volume of new homes coming onto the market could fall further, despite the fact that housing supply is at an 80-year low, according to a report.

Sentiment in the building sector began to decline again in the second quarter of the year, as fears over the scale of public spending cuts and ongoing uncertainty about prospects for the economy hit the construction industry, says the latest RICS Construction Market Survey.

New legislation from the EU may persuade sellers to make their homes more energy efficient before putting them on the market. The EU Directive comes into force in 2012 and will make it compulsory for all adverts for houses for sale to feature an energy efficiency rating.

As if they needed further confirmation, first time buyers have never had it so bad. Figures from Nationwide and the Council of Mortgage Lenders (CML) demonstrate that first time buyers, who represent 38% of all house purchases in the UK, today face raising higher deposits and borrowing more money than at any time in the last 25 years.