Rents may 'escape impact of credit crunch'

27/8/2008

Experts have suggested that while the credit crunch has had an adverse effect on property prices, rental costs could escape its impact.

David Salusbury, chairman of mydeposits.co.uk, said that rents would be decided by supply and demand.

He explained that property prices were particularly high at the moment and the market was now experiencing an adjustment.

However, he said that it could be argued that rents are currently low when one examines the percentage of the property value a landlord gets back in rental yields.

Mr Salusbury commented: "Rents are a function of the economic circumstances of the day and are a function of property values and market forces."

Rentright's Residential Rental Price Index found that the average rent in the UK in August 2008 stood at £588, an increase on the previous month but a drop from the £762 one could expect to pay at the same time last year.

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