Gloomy letting agents have reported a fall-off in private rentals coming onto the market around the country.

The RICS’s monthly residential market survey says letting agents returned a net supply balance reading of -16%, which suggests the flow of landlords instructing letting agents to rent their properties has taken a further hit.

Looking ahead, a net balance of +33% of RICS-registered agents envisage rental prices rising in the next three months, although it notes that the latest forecast is the lowest since Q1 2021.

Tenant demand rose modestly in July, according to a net balance of +18% of respondents – down on the average of +32% seen over the past 12 months.

Many letting agents are pessimistic about the near future, with the same message coming across from offices as far apart as Maidenhead, Canterbury and Hexham, where more landlords want to regain possession to sell or are selling up when a tenant leaves.

Fear

Some landlords fear the government’s next steps including a likely hike in CGT, according to John Chappell at Chappell & Co Surveyors in Skegness, who has seen several more withdraw from the sector due to reports of plans to further strengthen tenants’ rights.

“No self-respecting professional supports poor housing or landlords but this has the potential to cause a supply shortage crisis,” he adds.

Government policies and actions have led to a significant fall in availability of letting properties, says Paul Lucas (pictured) at R.K.Lucas & Son in Haverfordwest, who reports many landlords are completely pulling out of the market, with no one available to fill the hole in availability.

Further rent increases this year are inevitable as the PRS shrinks, believes William Delaney at Coopers of London. He adds: “Faced with yet more legislation, a dysfunctional court service, and an unfair tax regime, the appeal of retaining their investment is considerably diminished.”