RICS: Buy to let being supported by pension crisis
The UK buy-to-let market is being supported by the ongoing pensions crisis.
That is according to the Royal Institution of Chartered Surveyors (Rics), which finds that property investors are holding onto properties for the long term to support their retirement.
"The strength of the market is demonstrated by the fact there has been no significant investor exodus in the past year despite shrinking returns as house price rises stall," said Rics housing spokesman Jeremy Leaf.
"Many buy-to-letters are now choosing to stay in for the long haul, viewing their investment as a more significant part of their pension plan. For the time being at least this looks set to continue, with public confidence in pensions at an all time low."
Rics finds that tenant demand for rental property is at its highest since January 2004, while rent levels have increased for the tenth consecutive quarter.
And this, coupled with the poor outlook for pensions, means few landlords are selling properties.
Just 4.1 per cent of existing buy-to-let investors are selling rather than re-letting when tenancies come up for renewal, the Rics figures show, less than half the level of last year.
Rising employment and continuing demand from first-time buyers unable to get a foot on the housing ladder are also driving up demand for tenancies.
Rics reveals that the majority of tenants in the UK are currently under 35, with the youngest households paying the highest rents and the oldest the lowest.
This increase in demand is strongest in London, the south-east and the eastern region.
But despite this strong rental demand, high prices and low house price inflation means there has been no significant influx of new investors to the buy-to-let market.