The latest rentals market snapshot by the Royal Institution of Chartered Surveyors gives the now-familiar story of how demand is far outstripping supply.
The snapshot - which is basically a measure of surveyors’ sentiment - shows a net balance of 36 per cent of surveyors reporting an increase in tenant demand over the past month yet landlord instructions falling for the third month in a row. The result, of course, is rapidly rising rents.
However, perhaps more interesting is an insight into how lettings agents see the current market - and their comments, included in the RICS snapshot - ring alarm bells for the private rental sector.
Here is a representative sample of their comments:
Bruce Collinson of Leeds agency Adair Paxton says: “Tenant demand has been very strong for 12 months and if as predicted up to 300,000 private landlords exit the market because of proposed changes to law, with nobody else filling the gap, rents might rise sharply. The proposals on EPCs/Band C will cause chaos.”
Gary Thompson of Barnsdales agency in the north of England comments: “There is growing demand for residential lettings which appears to result from low paid workers migrating to jobs where there is affordable accommodation; and due to a reduced stock as landlords exit the lettings market for reasons relating to maintenance costs and onerous lettings procedures.”
John Chappell of Chappell & Co Surveyors in the East Midlands sees it this way: “Landlord clients now actively re-assessing remaining in the market due to ongoing economic situation and the proposed legislation changes to the private rental sector, which by assuming all landlords are the bad guys, could see a marked decline in private sector rental property availability.”
And in the West Midlands, Richard Franklin of Franklin Gallimore states: “Some landlords thinking over the proposed amendments to the sector - although many have sought to sell taking advantage of market conditions. Increase in bad debts prompting service of Notices to Quit - a pre-cursor to a harsh winter.”
Maidenhead agent James Farrance, of the Braxton agency, sums up the situation: “Rents continue to rise driven by lack of available stock in the PRS. We are now seeing the Butterfly effect of the extra second home stamp duty, Tenant Fees Act, reduced expense allowances and threat of AST changes causing landlords to exit the PRS driving up rental levels at record rates.”
In Scotland there are already stricter controls over lettings and rents than exist in the rest of the UK, reflected in the comments of Edinburgh agent John Brown: “As landlords leave, supply is less and rents are moving forward. The [Scottish] Government moving towards rent capping and offering tenant security as available during Covid to tenants with addition of costs to meet Energy standards more smaller landlords will leave the sector.”
And in London, high profile agent Jeremy Leaf - himself a former chair of the residential faculty at RICS - tells the survey: “Aspiring first-time buyers are increasingly taking refuge in private lettings as the cost of living crisis starts to bite but the continuing shortage of especially one bed flats is adding upward pressure to rents - and there’s little sign of change.”
It’s an extraordinary similar message coming from almost every agent in every part of the UK - a supply shortage being worsened by increased regulation and higher taxes imposed on landlords depicted as “the bad guy”.
You can see the survey for yourself here.
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