THE cost of renting a home in the North East has risen by more than 4% in the last year as many would-be buyers continue to find themselves locked out of the sales market, says the latest Rics residential lettings survey.
And the rise is expected to rise by 4.4% over the next year as the house sales market continues to stagnate.
The surge in rents in the region continues to be underpinned by a shortage of good-quality properties for tenants to move into, said the survey.
In the three months to July, the number of new properties coming on to the market dropped, with 18% more surveyors reporting falls in new instructions to market.
Meanwhile, demand continues to grow, albeit at a much slower pace than in recent quarters, as 14% more respondents reported rises rather than falls in interest from potential tenant.
Across the country, strong regional variations were apparent. The North West saw rents increase by the biggest margin with values growing by 6.9%, whereas surveyors in Wales reported that rents had stayed at the same level over the last 12 months.
Unsurprisingly, with rental values steadily increasing, gross yields have continued to edge upwards during the early part of the year, which has contributed to fewer landlords opting to sell their properties at the end of the tenancy.
Peter Bolton King, Rics global residential director, said: “While tenant interest is still riding high in the North East, what remains to be seen is whether many are willing to meet the increasing rents being demanded by landlords.
“The steady increase in rents across the region is partly down to the lack of available mortgage finance and the large deposits required by lenders to buy a home.
“These barriers to home-ownership need to be addressed alongside the shortage of new stock coming to the market, otherwise many would-be buyers will continue to have no other option but to continue renting.”