The lettings market in Portugal is continuing to benefit from the fallout in sales in the country’s property market, according to the most recent RICS/Ci survey.

Tenant demand and new landlord instructions in Portugal continued to increase further during November, albeit at a slower pace than the previous month, as did letting transaction expectations. However, the survey also showed that rents are falling quite sharply and rent expectations have turned increasingly negative. This could reflect an excess of rental stock on the market but there is also anecdotal evidence of a mismatch between the type stock offered and that in demand.

In terms of property sales, results from the survey showed a continued fall in demand, supply, and prices. House price declines continue to be driven by falling demand and new vendor instructions have fallen consistently this year.

Until September, new house prices had been falling less sharply than prices for resale homes. However, the November survey provides additional evidence that developers are now becoming less resilient to market conditions. Indeed, new house prices are now falling more rapidly than resales.

RICS Senior Economist, Josh Miller said: “Although sales volumes in the housing market continue to fall, volumes in the lettings market are rising as households who cannot access mortgage finance are opting for rented accommodation instead. Given the deteriorating macro economic backdrop – unemployment now stands at 12.9 per cent while economic sentiment has collapsed – and the tightening in credit conditions already underway, the lettings market is likely to continue experiencing high volumes of activity for the time being.”

For details of property for sale in Portugal, visit the Portuguese listings on Rightmove Overseas. One way to save money when buying in Portugal is to use a currency specialist when transferring your pounds into euros to complete the purchase of your property. For more information on this, contact Smart Currency Exchange.

To understand the full step-by-step process to buying a property in Portugal, collect The Overseas Guides Company’s ‘Portugal Property Buying Guide’