The survey shows that new instructions to let have risen steadily, reflecting a sharp rise in investment properties coming on to the market this year. The difference between chartered surveyors reporting a rise in instructions against those reporting a fall was 46%, up substantially from the 4% recorded in January of this year.
At the same time demand for properties from new tenants rose, with 21% more surveyors reporting an increase in demand over those reporting a fall in demand. Private lets were 78% of the market, up from 72% a year ago. Social lets stood at 5%, down from 6%; student lets were 4%, down from 5%. Flats have proven more popular than houses this quarter.
The corporate market, especially flats aimed at business tenants from overseas, suffered following the attack on New York in September. This sector ended the quarter with a 12% share of the market, down from 13% a year ago.
The rate of rent increase slowed for the second quarter in a row, and contributors to the survey expect rents to fall before the end of the year, the first drop for two years. This has had a knock-on effect on gross yields, which fell for the fourth survey in a row. Weaker rental growth and the long-term rise in house prices are exerting continued downward pressure on yields.
Over the next quarter chartered surveyors expect to see rents fall. Only the North of England is expected to buck this trend with slight rises in rents. London and the South East are expected to show the biggest falls.
RICS lettings spokesman, Jeremy Leaf, said: 'The corporate sector of the market has clearly been affected by international events since the beginning of September. Overall the market remains strong, fuelled by high house prices and attractive rents. The survey shows clear indications that at the moment bricks and mortar are considered a better long-term investment than the vagaries of the stock market.'
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