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Rents in UK will rise for next five years, RICS predict

Rents across most of the UK look set to increase as rising demand from prospective tenants puts upward pressure on values, according to the February 2020 RICS UK Residential Market Survey.

Demand for property has increased in recent months, but the number of homes coming on to the private rented market has remained at a record low. 

Surveyors have reported a shortage of properties to let which is driving up rental prices, with the number of properties listed by landlords for rent falling again last month - extending the decline since the trend was first recorded in 2016. 


Rising demand for homes to rent and falling supply will see rents increase by potentially 2% - and up to 3% per annum by 2025 if this trend is maintained, according to RICS 


Growing demand is also placing upward pressure on house prices. 

The February 2020 UK Residential Market Survey revealed a net balance of +20% of respondents saw an increase in new buyer enquiries over the month, the third period of growth in a row. 

In addition, experts are forecasting a better sales outlook for the rest of the year, with +61% of survey participants saying they expect more homes to be sold as the year progresses.

New homes coming onto the sales market also increased for a third straight month, with new instructions seeing a net balance increase of +15% in February – with West Midlands and the South East seeing the biggest bump in new properties coming onto the market.

Strong demand has also seen prices increase in February, with a net balance of +29% of contributors reporting house price growth – up from +18% on the previous month. 

While there was growth in all regions of the UK, London, Yorkshire and the Humber and East Anglia all saw the strongest increase in house prices. Furthermore, a net balance of +22% are expecting house prices to continue to rise further over Spring.

But concerns have been raised by property professionals about the impact of coronavirus which although yet unknown, could adversely affect viewings and the traditional spring house selling season.

Simon Rubinsohn, RICS Chief Economist, commented: “It is encouraging that the results of the latest survey continue to show a positive trend both in terms of potential buyer interest and new instructions to agents. Indeed, this is the first time since 2014 that new supply to the market on the RICS indicator has increased for three consecutive months.

“Inventory levels are still at historically low levels despite this but the firmer trend in appraisals suggests that the picture could improve over the coming months providing the coronavirus doesn’t become more of an inhibitor of activity in the sector.

“For now at least, feedback around expectations are consistent with activity levels continuing to strengthen albeit relatively modestly.”

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Poll: Do you agree with RICS that rents will increase by 'potentially 2% - and up to 3% per annum by 2025'?


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    Well I never. Fewer landlords means higher rents shock.

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    Great for the few landlords which will remain after this government has decimated the private sector.

    • 15 March 2020 07:22 AM

    The LL not reliant on mortgages are pretty much impervious to anything Govt does.
    All it means is less income is earned.
    Not really a big problem.
    Perhaps no holiday in the Maldives that year!

    Leveraged LL will be the ones forced to leave the sector.

    Though of course many will just sell up to leave mortgage free properties.
    That is my intent.
    5 down to one property.
    Of course that means considerably fewer rental properties; about 50% less.
    But so what who cares if there are homeless tenants?
    Not the LL fault.
    The fewer rental properties the higher rents can be charged from what would be considerably unmet demand.
    Currently there are still too many rental properties available.
    We need at least 3 million rental properties fewer.
    Then the remaining most likely mortgage free LL can jack up rents to realistic market levels.
    There will be tenants to pay these.
    The ones that can't are NO responsibility of the PRS.


    Paul, that's a profound clear cut analysis: LL not reliant on mortgages have much headroom to dance to any music the Govt plays (i.e. whatever policies are in place).

    In someway, it's appalling that when the Govt requires a boost in the economy, it does so through schemes such as using Mortgage incentives. And when it feels like no further boost is needed, it tends to perhaps punish those who helped to boost the economy.

    As a result, it increases the spiral of selling as most landlords (including yourself I believe) are eagerly looking forward to becoming mortgage free. I believe there might be other strategies besides selling that could help landlords become mortgage free. We'll love to hear your point of view on that in case you know any?

  • Mark Wilson

    James and David, did you notice that the report failed to take into account corona virus.? Do you really think your tenants will have the ability to pay more rent? I don't think so!


    Don't pay - don't stay! We're not charities. Try Shelter. They claim to be a charity.


    My particular tenants will not be able to pay a higher rent but there are plenty of more affluent tenants who will and my current tenants will become homeless. A sad fact of life brought on by government taxation.

  • icon

    I don't agree with RICS on this, many are struggling already, there is the little matter of affordability.


    You are correct Michael.
    I have raised my rents by around 4% this year for the first time ever.
    Ongoing maintenance costs, service charges and other outgoings are having a major impact on my income.
    I am unable to raise rents to a realistic figure as my tenants would not be able to afford them. Rents in our area haven't increased much to any extent, in the last 20 years.
    Inflation, although low, is also eating into my bottom line, necessitating in my having to supplement my income with savings.

  • Phil Priest

    This is the affect of supply and demand. The more pressure landlords are put under the fewer properties there will be available to rent.
    This then creates problem No.2, with the legislation stating you cannot turn away DSS applicants, since when did the government pay enough for the state welfare to cover the 'market rent' in the majority of the country?

    Shelter and the government are pushing this potential vote gaining promise into a dead end, and the ones to suffer will not be in parliament on £80k per year but the poor people who rely on the state for help.

    *Market rent is what someone is willing to pay for it.

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    • 15 March 2020 07:08 AM

    There isn't currently any legislation that prevents LL from stating they won't let to DSS tenants.
    If this ever occurs then LL will have to put

    Subject to Status

    Many DSS tenants won't even be able to afford the rent required.
    If they can afford the rent then a LL will be further able to exclude such DSS tenants as most LL want rent in advance and a deposit.
    Possibly also RGI.
    Very few DSS tenants could ever meet these requirements.
    So effectively Constructive rejection.
    There will just be many pointless phone conversations where DSS tenants will still be rejected.
    A lot easier just reading two words.

    No DSS

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    If a rule were to be brought in to stop us refusing the DSS dross then we would have to insist on a home owing guarantor , they would find that very difficult to provide.

    • 15 March 2020 09:49 AM

    In my 10 years of being in this game I have never been able to source a home owning guarantor and only 1 tenant ever qualified for RGI.
    It is simply the case that those who are tenants have very poor credit status and DON'T have family that can provide guarantees or as is more likely to be the case is prepared to be a guarantor.
    NO WAY would I ever stand as a guarantor for ANYONE!!

    You take this logic of DSS by insisting lenders offer mortgages to them!!!
    Thinking further about the DSS situation.
    If Govt changed the eviction process to allow LL to get rid of rent defaulting DSS tenants instantly with no CC actions that could persuade many LL to take on DSS tenants.
    Non DSS tenants would be subject to the normal eviction processes

  • icon

    The end result would be the same as most Benefit tenants (defined as those whose sole source of income is benefits) default on the first rent payment, so with Paul's idea they would be evicted after a month. I blame Universal credit on this, too little, too late and too many sanctions.

    • 15 March 2020 11:02 AM

    Yep totally agree with you.
    Advance HB would be needed.
    But even if a new eviction process for DSS tenants occurred very few LL would initiate the process if they know the HB is delayed by the UC process.

    But clearly there need to
    be changes in the way the law pertains to DSS tenants to ensure they are not penalised or suffer as a consequence of the system.
    It is the 'system' that deters most LL.
    Vast majority of DSS tenants are good people

  • Matthew Payne

    It wont be a question of rejecting DSS tenants diplomatically as we head towards 10 tenants for every property available over the summer. The Alpha tenant has been born. The safe low risk tenant. The tenant every landlord now wants, pays a market rent on time, flies through references, looks after the property as if it were their own, considerate and polite, no pets, no kids, over 25. Section 24, Section 21 abolition, the Tenant Fees Act created this genetically mutated PRS tenant but there are plenty of them even if they are in the minority. DSS tenants like many other reasonably sound tenants not on benefits will simply be told the LL has rented to someone else whose application was more suitable.

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    • 16 March 2020 14:14 PM

    For sure...There will NEVER be a DSS tenant in my properties...Never ever.....
    Evert in the past there was one, it became a nightmare.

    No, no no and again NO!


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