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Surveyors expect to see rent rises in the New Year as the number of buy-to-let properties coming onto the market fell for the first time since January 2008.

According to the latest Royal Institute of Chartered Surveyors survey, while the recent pick up in the housing market seems to have led to drop off in the number of rental properties, a fifth more surveyors expect rents to rise rather than fall in the next three months.

The drop off in buy-to-let property supply is the main driver for the more positive sentiment with regard to rents, says the society, with new buy-to-let properties reaching their lowest levels in the surveys history. RICS says it is seeing less landlords come onto the market, so it thinks the competition for rent will fall and rents will therefore rise next year.

This is in stark contrast to levels seen late last year when the housing market was still suffering from falling prices and many would-be sellers were turning to the lettings market when their houses failed to sell.

And demand for rental property is still rising as 16% more surveyors saw rental activity over the past three months pick up. In particular it found a demand for houses was particularly strong, with 22% more surveyors reporting rising rather than falling numbers of people looking to rent.

RICS says: "It seems the current upward trend in the housing market is having a more significant effect on lettings, with many of the accidental landlords returning to the market to take advantage of the recent price increases. As a result the recent oversupply is reversing, with new landlords at the lowest levels we have seen. This of course is impacting on prices and tenants no longer have as strong a bargaining power as they did."

SOURCE: RICS, 02/12/09

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