Rents increase good news for landlords with private wealth?

Those with private wealth looking to invest in the housing market may be encouraged to hear that higher demand for properties to let has caused a hike in rental prices, new figures have revealed.

The report, published by the Royal Institution of Chartered Surveyors (Rics), showed 39 per cent more surveyors reported a rise in rental prices than a fall over the third quarter of 2010, an increase of 12 percentage points on the previous three months.

Acceleration in the level of demand combined with a reduction in the supply of new properties is thought to be behind the jump in rent, with 33 per cent more respondents reporting a boost in demand than a drop, the study continued.

The analysis went on to demonstrate properties in the capital experienced the biggest leap in rental prices, while those in the north grew slightly after a recent decline.

Jeremy Leaf, a Rics spokesman, said the number of houses available is lower than the number of potential tenants, adding "there are increasing indications that more landlords are recognising these benefits and looking to add to their portfolios".

House prices fell by 0.3 per cent in November compared with 0.7 per cent in October, according to building society Nationwide. ADNFCR-2318-ID-800271374-ADNFCR