Landlord instructions have fallen to their lowest level since May 2020 as letting agents report that the rental market remains challenging.

Data from the Royal Institute of Chartered Surveyors’ (RICS) monthly UK Residential Market Survey reveals that a net -38% of agents saw instructions fall in September, with landlords continuing to exit the sector amid ongoing regulatory changes and cost pressures.

It was a flat monthly picture for tenant demand (-1%), exacerbating an acute imbalance between demand and supply. As a result, rents are projected to rise steadily; a net +23% of agents reckon rents will move higher during the next three months. The RICS expects rents to rise by about 3% over the next year.

Concerns

Many expressed similar concerns over the upcoming Budget, which they expect to include further property-related taxation. Colin Townsend, at John Goodwin in Malvern, reports a slowdown in general activity across the board with more landlords choosing to leave the market. “A contributory factor may be worries about the November Budget and where additional taxes may fall,” he says.

Quality

“The imbalances in the letting market remain, with a lot of good quality stock leaving the sector in advance of the rent reform legislation,” adds Richard Franklin, at Franklin Gallimore in Tenbury Wells, who says rents are continuing to increase to unsustainable levels, with arrears on the rise.

Lettings remain active, but landlords face relentless pressure, according to James Farrance, at WD Braxton in Maidenhead. “The government’s anti-landlord stance favours corporate giants,” he explains. “Bad for tenants too, with rising rents, rigid terms, lack of repairs and a worrying shift away from fair, diverse property ownership.”

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