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Rental costs will keep rising, says Rics

House keys
Image caption Some potential first-time buyers have continued to rent because of mortgage rationing

Rents are continuing to rise for tenants and more increases are expected in the coming months, a survey has suggested.

About 42% more surveyors reported a rise in rents than those who saw a fall during the three months to the end of April, the Royal Institution of Chartered Surveyors (Rics) survey said.

Tenants' rising costs are most marked in London and south-east England.

Some 33% more surveyors expect rents to go up than those predicting a fall.

"Although we are beginning to see more mortgages aimed at first-time buyers, many potential homeowners are still restricted from getting a foot on the property ladder, leading to increased demand in an already oversubscribed rental market," said Rics spokesman James Scott-Lee.

"There has been a small uplift in supply, but the imbalance between demand and availability can only mean rents will continue to rise."

First-time buyers

A separate survey, published last month, said that rental costs in England and Wales had reached a record high in April.

LSL Property Services, which owns a lettings agents network including chains such as Your Move and Reeds Rains, said the average rent stood at £692 a month.

However, there have been some signals that lenders are looking more favourably towards people looking to get on the property ladder.

There are now 183 mortgage products on the market aimed at first-time buyers, compared with 62 products two years ago, according to financial information service Moneyfacts.

There are also 31 different loans available for people offering a 5% deposit, although this was far lower than the 1,079 available at the height of the property boom in July 2007.

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