» Read the full story

The latest study into house purchase by the Royal Institute of Chartered Surveyors has found that people are simply unable to buy and sell homes right now – meaning renting is going to stay high.

Surveyors are finding that pent up demand has not yet translated into sales. The average number of transactions per estate agency over the last three months is now at 9.5, a drop from 9.8 in November, and the lowest figure since the survey began in 1978. London agents are experiencing the worst transaction levels with, on average, only six properties sold per agency over the past three months.

And despite depressing repossessions data, the net balance of surveyors reporting new instructions to sell remains in negative territory indicating that supply is very tight. So as much as people are not buying, people just are not selling.

A RICS spokesperson says: "Potential buyers continue to come through estate agency doors but without mortgage finance transaction levels are likely to remain close to all time lows. Worryingly, the lengthy process of obtaining mortgage finance, even for those with large deposits, is contributing towards the blockage in the market place. Family homes remain in demand but flats are proving harder to sell in many areas as first-time buyers are struggling to gain a foothold on the property ladder."

This is bad news for first-time buyers and home movers obviously, but not for landlords. People need somewhere to live, so if they cannot buy or sell then they rent. This data shows the demand for rental property is going to remain high, which means buy to let property is going to still be a great investment.

SOURCE: RICS, 10/03/09

To keep up with the latest News and comment on the UK buy to let market visit the Buy to Let Mortgage Blog