RICS survey points to huge demand for private rented properties

Demand from private renters surged in February, providing further evidence that UK housing has very much become a landlord’s market.

The RICS Residential Market Survey shows that a net +55% of respondents saw demand from tenants increase over the course of the month.

As a result, 12-month rental growth projections now stand at 4.5%, while RICS agents anticipate rents increasing by an average of 5% per annum over the next five years.

Emma Cox, managing director of real estate at Shawbrook, said: “However, in order alleviate the supply imbalance a meaningful commitment to building more affordable homes must be made. While a significant undertaking, building more homes will bring stability and balance to the market and help prospective homeowners enter the market.

“In the short term, there continues to be a real need for landlords that provide high quality properties across the country. Those landlords and property investors should seek advice to ensure they can navigate the volatility currently impacting the market, and be aware of what different lenders are offering to make sure they get the best terms available. This in turn may go some way to protecting them against any potential interest rate rises and market changes ahead.”

She added that the government’s Decent Homes Standard mandate, twinned with the proposed EPC changes to rental properties, should go some way to improve the quality of current rental stock on the market.

Buyer enquiries and sales on the rise

Buyer enquiries and sales both increased in February, albeit at a more modest speed than lettings.

A net balance of +17% respondents saw a jump in new buyer enquiries, the sixth increase in a row.

Meanwhile agreed sales rose, according to a net +9%, the strongest reading since May 2021.

In the next three months RICS predicts sales to increase, albeit at a slower pace – with a net balance of +11%, down from +20% in January.

Simon Rubinsohn, RICS chief economist, said: “Huge clouds of uncertainty hang over the economic prospects as energy prices continue to surge and the Bank of England grapples with how to manage monetary policy in this challenging environment.

“Despite all of this, there is little evidence yet that the mood music regarding the expectations for house prices or rents is shifting. Indeed, the medium-term projections from respondents to the RICS survey are continuing to gain momentum.”

Comments 1

  1. RICS here’s a tip for increasing the amount of rental property available. First plan to impose a list of costly regulations on rental properties that owner occupied properties don’t have to comply with. Secondly, cancel Section 21 so landlords lose control of their own property making tenants virtually eviction proof. Then require us to be immigration lawyers as per Right to Rent with a huge fine for any slip ups. Then, seriously consider imposing costly (for the landlord that is) licensing and inspection schemes. The absolute clincher would be rent controls or freezes. That should do the trick!

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