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Rent rises could ‘catch up with inflation, before the year is out’

Rental prices look set to increase in the coming months on the back of a growing supply-demand imbalance, as more people choose to rent rather than buy property, new figures suggest.

The latest data released by the Royal Institution of Chartered Surveyors (RICS) shows that many people, particularly would-be first-time buyers, are being left with little alternative but to rent property, owed largely to a dearth of homes for sale.

The poll of surveyors reveals that the average number of new property instructions in June fell for the 16th consecutive month, taking the number of homes on surveyors' books to the lowest level since records began in 1978, which means that demand for private rented accommodation is likely to rise as a result, placing upward pressure on rental values.


John Goodall, CEO and co-founder of buy-to-let specialist Landbay, commented: “Political uncertainty is always going to give people pause for thought when considering big transactions, so it’s not a huge surprise to see that fewer people have bought and sold houses over the summer.

“Beyond the political dimension, rising inflation and slowing wage growth are also dampening the purchasing power of aspiring homeowners, something which looks like it could be hitting demand, taking the edge off house price growth.

“With Brexit negotiations ongoing, and buyers facing a tighter set of borrowing criteria, we’re likely to see slightly lower levels of housing demand over the short to medium term. This puts extra emphasis on the buy-to-let market, which needs to house all of those that are yet to step onto the property ladder.

“If demand in the rental market rises as a result, we could see rents begin rising, and even catch up with inflation, before the year is out.”

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  • Mark Wilson

    With wage increases failing to keep up with inflation the proposition of this article sounds flawed. I thought the general consensus in the industry is that rents are falling.


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