A huge mismatch in the private rented sector - with demand continuing to significantly outstrip supply - has left renters tackling ever-rising living costs and plummeting affordability levels.

The latest residential market survey from the Royal Institution of Chartered Surveyors (RICS) reveals that tenant demand was up to +35% (net balance) from +10% in May, while new landlord instructions were flat. It believes the growing gap between supply and demand for lettings indicates that rental prices will continue rising for the foreseeable future, although at a slower pace. The market saw an average net balance of +53% throughout 2023.

Ridiculously high

Neil Foster, at Hadrian Property Partners in Hexham, reports that demand remains “ridiculously high” due to the structural deficit of private rented housing stock, while rent increases appear to be diminishing.

In Gwynedd, Tim Goodwin at Williams & Goodwin The Property People, says: “Landlords continue to leave the market due to fear of bureaucratic controls and tenant demand remains extremely strong, resulting in higher rents and numerous applicants desperate for the same property.”

Buyer demand

The RICS reports a small drop in new buyer demand in the sales market, with a -8% (net balance) nationally compared to the flat picture reported in April.

Chief executive Justin Young says as both the Conservatives and Labour have staked their claims as being the party of home ownership, for that to be the case, greater attention must be paid to improving conditions for generation rent, who are faced with rising rents and a lack of suitable options. He adds: “The housing market needs policies that think longer term, not short, and awareness that the different tenures are interlinked, so there is no one solution that will fix the situation.”

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