Rents fall after market 'flooded'

The demand for rental properties is increasing across Wales

An increase in the number of properties being put up for rent in Wales is pushing rents down, the Royal Institute of Chartered Surveyors (RICS) has said.

The number of new instructions to let flats and houses has risen 57% over the quarter, a RICS lettings survey found.

This has been mainly due to would-be sellers flooding the rental market with unsellable properties.

This huge influx has applied a downward pressure on rents with RICS expecting them to fall in the future.

The figures were released in the RICS lettings survey which also highlighted how demand for rental property remained positive over the last quarter.

This is because property sales are at their lowest level since records began as banks continue to limit the number of mortgages to prospective homeowners and buyers.

Competitive market

A total of 36% more chartered surveyors in Wales reported a rise than a fall in rental demand, up 2% on the previous quarter.

RICS Wales director Cathy McLean said: "The market place has become more and more competitive as many vendors have been forced to become amateur landlords, creating an inevitable downward pressure on rents where supply has matched demand.

"With national average house prices set to weaken in 2009, yields may increase for those investors who can provide the right product for the right market place."

Beverley Morgan, of Beverley Morgan & Company in Cwmbran added: "There seems to be an oversupply of rental properties and a lack of confidence from prospective tenants.

"The rental values have remained the same, although in some cases landlords are prepared to take less than the asking price."

John Pinn of Maverick Property Management in Cardiff agreed rents were being pushed down in some areas of the city, mainly in the centre and Cardiff Bay, where there are big new developments.

Mr Pinn said: "Where there are new apartments being built every three months, landlords with older properties are struggling."

But he said he did not see rents being pushed down across the board.