Pattern of extra tenants available in the market with fewer rental properties to proceed, RICS says

Rents will proceed to rise as extra folks enter the rental market with fewer properties to select from, the skilled physique for surveyors has mentioned.

Demand for rental properties rose “firmly” over the three months to July, in response to analysis from property professionals, the Royal Institution of Chartered Surveyors (RICS), marking the strongest quarterly decide up in demand for the reason that begin of final 12 months.

At the identical time, most surveyors mentioned directions from landlords additional decreased, leading to an imbalance of demand and provide.

The majority (63%) of the surveyor respondents to the RICS residential market survey count on rents to go up once more within the coming three months.

Such a excessive proportion anticipating a rise is a contemporary document excessive with knowledge going again to 1999.

Tenant demand had already reached a five-month excessive amid a “frenzied” lettings market again in April.

Rents at the moment are reaching an affordability “tipping point” with no signal of them lowering any time quickly, one respondent mentioned.

Analysis from Sky News confirmed renters at the moment are within the majority within the UK, with folks proudly owning their house outright the second largest group, adopted by mortgage holders within the minority.

“Demand shows no signs of letting up, supply remains constrained and that means rents are likely to continue rising sharply despite the cost of living crisis,” RICS chief economist, Simon Rubinsohn, mentioned.

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Squeeze on renters is symptom of Britain’s housing disaster

Interest in shopping for property fell, the survey confirmed, as 44% of respondents famous a decline in agreed gross sales throughout July, the weakest studying for the gross sales measure for the reason that early levels of the pandemic.

Instructions to promote properties additionally fell, regardless of mortgage payments changing into dearer for a lot of as a result of Bank of England charge hikes to scale back inflation.

The common charge on two and five-year mounted offers has surpassed 6% with an estimated 2.4 million mortgage holders needing to repair a brand new deal by the top of 2024, in response to UK Finance, the banking business commerce physique.

House costs have been falling as mortgage charges have risen and housebuilding exercise has slowed.

The results of that fall had been seen when main UK homebuilder Bellway introduced plans to chop jobs and shut websites.