The latest report from the Royal Institution for Chartered Surveyors (RICS) indicates that tenants face an “acceleration” in rent increases over the next five years. This is thought to be a result of the demand for private rented housing outstripping supply.
This is according to new figures published in the September 2019: UK Residential Market Survey.
The report states that the latest results for the lettings market indicate:
- Demand from prospective tenants will rise firmly for the eighth month in a row.
- Landlord instructions remain in decline
- With demand still outstripping supply, rent expectations remain positive for the next three months
- Rental growth of approximately 2% has been predicted over the coming twelve months
- Rental growth is expected to average around 3% per annum through to 2024
David Smith, Policy Director for the Residential Landlords Association, has responded: “Today’s figures demonstrate what we have long predicted, namely that because of recent tax hikes on the sector and threats to remove Section 21 repossessions without putting proper alternatives into place, landlords are not investing in new homes to rent, leading to demand outstripping supply. This only serves to hurt tenants as they face less choice and higher rents.
“Given how clear the evidence is the Government urgently needs to change course, and end those tax measures which are choking off investment in new homes to rent.”
The latest edition of The DPS Rent Index shows that average monthly rents in the UK have increased by 0.91% between July and September, which supports this prediction from the RICS.
The RICS’ September 2019: UK Residential Market Survey can be viewed here: www.rics.org/globalassets/rics-website/media/knowledge/research/market-surveys/uk-residential-market-survey-september-2019-rics.pdf