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LONDON-Rents are falling in the lettings market for the first-time in more than two years. The latest report from the Royal Institution of Chartered Surveyors which covers activity all over the country, shows rental levels have fallen steadily since their peak in October 2000 which, combined with recent increases in property prices, have pushed down gross yields for landlords for the sixth consecutive quarter.

Activity remained relatively unchanged overall but for the next quarter, only around 8% of chartered surveyors expect rents to rise which confirms the rather depressed nature of the market at present. Gross yields are expected to stay under pressure as residential property prices continue to rise.

RICS national housing market spokesman Jeremy Leaf said: “The letting market in some areas is saturated with properties, particularly in parts of the London area, as a result of the rush to invest in buy-to-let with too many landlords chasing too few tenants at the moment which is driving rents down to a level where making a profit is difficult. Many investors are disappointed that buy-to-let has not lived up to expectations with some even considering selling or re-arranging their property portfolios as a way of trying to improve overall performance. We would advise anyone considering entering the buy-to-let market at the moment to take professional advice before proceeding or even delay until market conditions improve.”

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