Surveyors are the latest group to report a cooling rental market in the UK, with slowing in demand among tenants for the first time since 2020.

The Royal Institution of Surveyors (RICS) says its research among member estate agents shows tenant demand dropped off 1% during November which, although it says this may be part of a seasonal slowdown.

Agents also report landlord instructions continuing to fall, with a net balance of –13%, contributing to the ongoing imbalance between supply and demand in the rental sector.

‘Net balance’ is produced by taking the number of agents reporting a rise in landlord instructions and subtracting it from the number reporting a drop.

Consequently, despite the slower demand backdrop, rental prices are forecast to edge higher, with a net balance of +29% of respondents expecting increases in the near term.

Raising rents

This is not helped by Labour’s plans to make it more difficult for landlords to raise rents once the Renters’ Rights Bill become law next year, fears about which are prompting many landlords to raise rents before the likely deadline, particularly if they have been charging ‘below market value’ for some time.

“We are seeing Landlords exiting the market over legislative and tax changes which is reducing the amount of houses available for rental,” says Robert Newton-Howes (pictured), a director of Yorkshire Surveyors.

“For the first time I can remember, I am seeing significant numbers of HMOs being put up for sale in Article 4 direction areas.”

Mark Lewis of Symonds and Sampson in Dorset, adds: “The extra stamp duty on additional properties has stopped dead any buy-to -let investors and landlords feeling suffocated by government legislation more buy-to-let properties are being sold.

“Fewer landlords means less housing; one wonders who will be building properties to fill the massive shortfall.”

Jeremy Leaf (pictured), north London agent and former RICS residential chairman, says: "With rentals, supply has only increased marginally whereas demand and rent levels have eased in response to affordability concerns. 

"Those properties where rents previously increased the furthest and fastest have been particularly affected. Only realistically-priced stock is generating offers with smaller flats holding sway in the popularity stakes over larger houses.”