Figures reported by surveyors yesterday show 89% of rental accommodation coming on to the market is owned by private individuals and only 9% by institutions.

Surveyors report that the amount of rental property coming onto the market is rising at the fastest pace for nearly a year. A net 36% of surveyors reported a rise in new instructions for the three months to July, more than double that for April.

As the buy-to-let market goes from strength to strength and large sectors of the population are priced-out of buying their own home, RICS (Royal Institution of Chartered Surveyors) is calling for the government to encourage insurance and pension fund investment in the residential property market.

This should be done, RICS argues, through Real Estate Investment Trusts (REITS) to stimulate diversity and growth in the market.

Tenant demand for rental accommodation remains at its strongest for two years supported by uncertainty in the sales market and frustrated first time buyers. A net 24% of surveyors reported a rise in lettings activity. Private lets are accounting for 79% of the total and 10% are lets to companies.

Rise in rents expected

Rents are steady across most of the country and a net 5% of surveyors expect rents to rise in most regions over the next three months. Surveyors reported that the average rent in Great Britain was £700 per calendar month. Although rents in London are still the highest in the country, at an average £1,560 per calendar month, rents in London and the Southeast continue to decline.

RICS residential lettings spokesman, Jeremy Leaf, said:

“Fears of a collapse in the housing market have evaporated and interest rates remain low, bringing more buy-to-let investors on to the market.”

“By introducing Real Estate Investment Trusts, the government will encourage insurers and pension funds to diversify their portfolio and invest in residential property.”

“In the long run, we believe a better balance between institutional and smaller scale private investment will ensure steady growth in the lettings market, improved rental accommodation standards and choice for an increasingly mobile workforce.”