As many as 20% of agents expect rents to rise again within the next three months.
The latest market snapshot from the Royal Institution of Chartered Surveyors suggests that tenant demand has been broadly stable over the winer.
However, landlord instructions are still low so supply remains an issue – as a result, 20% of survey participants expect rents to rise over the coming three months.
The RICS snapshot is a sentiment survey, and contributing letting agents remain broadly pessimistic about the private rental sector in the light of the Renters Rights Act.
For example:
John Chappell of the Skegness firm Chappell & Co comments: “As the Great British Sell Off by Landlords continues, Tenant demand is of course still increasing, as are rents. However, a growing number
of applicants are struggling to satisfy credit reference checks etc, so we expect Landlord rent insurance take-up to increase, at greater cost to tenants.”
Richard Franklin from the Tenbury Wells agency Franklin Gallimore says: “Many landlords still leaving
BTL sector and rents rising given shrinking supply. This appears not to have been properly considered when imposing the new legislation. Over regulation is a deterent to all, not just those “bad apples”. Shrinking stock =higher rents.”
Jeremy Leaf, who runs Jeremy Leaf & Co in north London, sees it this way: “Now that the Renters’ Rights Act is almost upon us many landlords are trying to sell when tenancies end or come up for renewal. This has resulted in lack of choice, thus keeping rents at a higher level than might have been expected due to continuing cost of living concerns.”
William Delaney from Coopers Of London adds: “Landlords are continuing to leave the rental sector and selling up when tenancies end. Egregious government measures against the PRS, the Renters Rights Act and lack of capital appreciation in recent years provide little incentive to retain a rental investment in parts of London.”
And there’s a pithy comment from Kevin Henry of the Southport company Bridgemane Surveyors: “Recent government policies are expected to contribute to increased rents in the marketplace.”
In the sales market, the latest agents’ report by RICS says the Iran War is already having an impact.
While some surveyors report a more encouraging start to the year, confidence has nonetheless weakened as concerns over inflation, interest rates and global instability intensified.
New buyer enquiries weakened further in February, with the headline net balance slipping to -26%, down from -15% in January.
Agreed sales also remained subdued, posting a net balance of -12%, while near-term sales expectations softened to -2%.
Even so, RICS believes the longer-term outlook remains more resilient, with a net balance of +17% of respondents still expecting sales activity to rise over the next 12 months.
House prices were broadly flat at the national level in February, with the headline price net balance registering -12%, only slightly weaker than the previous month.
