Residential property rents in the UK have dropped as failed sellers flood the lettings market with unsellable properties, according to the latest figures.

There are now more properties to rent than ever before and while this may be good news for tenants it has resulted in a drop in rents, says the Royal Institution of Chartered Surveyors in its Q3 lettings survey.

Supply is now at historic levels as frustrated vendors are placing their property on the market to let as they have been unable to agree sales due to a lack of demand in the housing market.

Once the favourite of property investors and home-seekers, Residence Bel-Air in Pok Fu Lam is being shunned as prices and sales plunge in the secondary market.

Prices fetched by sales at the Cyberport development last month were down more than 40 per cent from their peak in the first quarter, data shows.

Despite the big fall in prices, buyers remained in short supply and transaction volumes last month were 50 per cent lower than those recorded in September.

Recent events have led investors to overseas markets for the buy-to-let market. The United States, with its sub-prime crisis and teetering on the brink of a recession offer some great market corrected fair value opportunities to enter this market.

The recent bubble made it difficult for the average American to buy a home. This is especially true in the areas of prime real estate in metropolitan areas such as California, Orlando, New York and Dallas. Now with property prices dropping YOY as much as 30% in cities like Las Vegas, Miami, Phoenix and Los Angeles there is a tightening of the credit supply making it very difficult for buyers to obtain financing even with solid credit histories and high paying salaries.

A dramatic 1.5% cut in the base rate has underlined the level of problems in the property and financial markets. The scale of the Bank of England’s rate cut caught analysts by surprise, with the base rate now falling to 3% - the lowest level since 1955.
Lloyds TSB, its specialist mortgage lending subsidiary Cheltenham & Gloucester and Abbey immediately cut mortgage lending standard variable rates in line with the Bank of England reduction. However, other lenders did not quickly follow suit - arguing that inter-bank lending rates (the Libor) are not falling in line with base rates.
Brokers suggested many mortgage lenders would absorb some of the cut to improve their own lending margins, rather than follow the lead of Lloyds TSB and Abbey. Darren Cook, an analyst at information providers Moneyfacts, said: “Mortgage holders currently paying their lender’s SVR are hoping that their lenders will be as bold, but time will tell. Some lenders have still not passed on the bank’s previous cut of 0.5% and if this is an indication of things to come, a decision to cut rates by 1.5% will indeed cause some healthy debate in bank and building society boardrooms up and down the UK.”

The government has committed itself to making a 60% reduction in carbon emissions by 2050. As the existing housing stock accounts for nearly 40% of the UK’s carbon emissions, it is clear that the private rented sector has a key part to play. The government has chosen a number of vehicles to drive energy efficiency improvements in the sector.