An ongoing shortage of rental properties is expected to keep pushing rents higher as more landlords look to scale back their portfolios, reports the RICS.
Its monthly residential survey reveals a “sluggish” supply of rental properties and new landlord instructions continuing to fall; the net balance for new rental listings dropped to -21 in August, down from -9 the previous month.
Tenant demand remains positive, although the pace of growth has slowed compared to previous months – down from +26 recorded in July to a net balance of +11 in August. The RICS says near-term rental price expectations also remain heightened, with a net balance of +39 of survey respondents predicting that rents will increase.
Agents around the UK point to strong demand, limited supply and fears around the government’s next steps around taxation. Neil Foster at Hadrian Property Partners in Hexham reports that rents are rising and demand is off the scale. “Rent for two and three-bedroom property is some 25-30% higher than 2021 and only going to inflate further as stock diminishes and landlords are punitively treated by the mooted new government’s tax grab,” he adds.
Richard Franklin at Franklin Gallimore in Tenbury Wells says rent rises continue, including by some landlords who have not reviewed rents for years, which is causing overall inflation to continue. “The trend of BTL investors selling off, fearing a more draconian CGT regime continues - further reducing supply,” says Franklin.
In Skegness, landlords are still exiting the market, reports John Chappell at Chappell & Co Surveyors. He adds: “Blocks of flats are selling at auction but achieved sale prices are approximately 25% off previous market value as institutional buyers reflect the risks (actual and potential), of owning rental property in the UK.”
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