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Buy to let reaping benefits of market downturn

Buy to let is reaping the benefits from the latest slump in property sales, according to a survey from the Royal Institution of Chartered Surveyors (RICS).

The survey said the number of surveyors who reported an increase in instructions to let property rose by 29 per cent in the quarter to April 2008.

Compared to the two per cent fall during the previous three months, this supported suggestions that the downturn in property sales was having a positive effect on buy to let

Concurrently, those people unable to take their first step onto the property ladder or were unwilling to buy in the current market were making the choice to rent until the market improved, which also aggravated yield rises.

RICS said 23 per cent more UK surveyors had reported a rise in gross yields that the five per cent in the previous quarter.

It also reported that gross yields had increased at their fastest pace since the survey began reporting them in April 1999.

This appeared to have halted the recent retreat of landlords from the market.

The survey also showed that landlords who sold their properties when tenant leases expired fell from 4.6 per cent in the previous quarter to 4.2 per cent.

Earlier this week RICS predicted property sales could fall by 40 per cent this year.

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