Although rents have dropped across the residential lettings sector rental expectations suggest the trend is set to moderate, says the RICS Lettings Survey published today

The future looks a little more encouraging for landlords. Rental expectations have improved markedly. The net balance of surveyors anticipating future rental declines rather than increases is in decline. 

An interesting development in the latest survey is the increased willingness of landlords to consider selling their property at the expiry of a tenant lease. This has edged back up to 1.8% having fallen to just 0.2% in the three months to January.

Tenant demand for rental property continued to increase, albeit at a slower pace. A net balance of 16% more surveyors reported a rise than a fall in new tenant lettings.  The net balances of surveyors reporting new instructions to let both flats and houses (an indicator of supply) are still rising but the pace has started to slow. 17 percent and 12 percent more Chartered Surveyors reported a rise than a fall in new instructions to let flats and houses respectively, down from 44 percent and 49 percent.

RICS spokesperson Jeremy Leaf commented: "Property transactions are starting to rise from very low levels and the influx of supply in the rental market has slowed as vendors begin to find buyers. Demand for rental property is still high but tenants have been able to take advantage of a flooded market to negotiate lower deals. Even so, the downward pressure on rents should ease in the coming months providing some good news for landlords.