Rent prices 'a result of supply and demand' - buy to let mortgages

26 August 2008

Despite the credit crunch, rental prices are "not particularly high at the moment", according to tenancy protection website mydeposits.co.uk.

Chairman David Salusbury said that although economic slowdown is pushing property values up, its effect on rental prices is a "different matter" as this cost is a result of supply and demand.

The boost in supply of accommodation to let as the current economic climate makes it difficult to sell homes. This has led to a boom in buy to let mortgages.

Mr Salusbury commented: "Rents are not historically high; in fact, if anything, one could make a case for them being low." He explained that rental yields are "actually quite low at the moment" when considered as a proportion of property prices.

The average rent in the UK stood at £588 in August 2008, as reported by Rentright's residential rental price index, compared with £762 from August 2007.