BTL sector 'running out of steam' - RICS

THE buy-to-let sector may be in danger of running out of steam, according to the results of a survey conducted by the Royal Institution of Chartered Surveyors (Rics).

The survey of residential lettings revealed that the number of new instructions from landlords dipped at the end of last year; the first time this had occurred since 1998.

Rics attributed the downturn to tighter mortgage availability for would-be landlords, as a result of the credit crunch.

"Our figures are based on just the last quarter of the year, by which time we believe mortgage lenders had started to tighten their lending criteria," said a Rics spokesman.

The Rics survey also found that demand from tenants, while still buoyant, was not quite as strong as before.

"While banks remain cautious about offering loans, demand for rental property will continue to increase, with many would-be-buyers unable to make the jump to home ownership," said Rics.

"Established investors continue to reap the benefits of the current uncertainty in the housing market and have been enjoying the fruits of rising rents," it concluded.

The Rics survey compared with the Council of Mortgage Lenders (CML) findings that the number of buy-to-let loans in 2007 as a whole was up by nearly a quarter on 2006.

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