Property surveyors across the UK have reported a slowdown in tenant demand along with continued levels of diminishing stock.
The December 2023 Royal Institute of Chartered Surveyors (RICS) UK Residential Survey reveals that demand rose according to a net balance of +17%, although this had softened in recent months, and was down from a high of +59% in July.
But with landlord instructions remaining scarce, a lack of properties continued to underpin rental prices; as a result, a net balance of +50% of RICS members expect rents to rise over the near-term, with a 4% increase this year, and for rental growth to average 5% per annum over the next five years.
Neil Foster, at Hadrian Property Partners in Hexham, says the current situaiton is like a stuck record. “Too few private rental properties and too many tenant applicants keep driving rents higher and ever less affordable,” he reports. “This is a crisis to which government appears wholly content to turn a blind eye.”
Years of diminishing returns and anti-landlord legislation are starting to bite, according to John Chappell, at Chappell & Co Surveyors in Skegness. He has seen a spike in landlords selling up but says this is now investment rented property (blocks) rather than single houses.
Christopher Jowett, at Jowett Chartered Surveyors and Estate Agents in Huddersfield, says landlords are considering selling more properties due to higher interest rates for savings and in order to have less hassle with tenants. He adds: “In the last month we have noticed a slowdown, and we think rentals are levelling off after a frenzied market over the last two years.”
In Scotland, Allied Surveyors has also seen demand slow, and Grant Robertson explains that stock levels are down. “What will the Scottish government try in 2024 to break the spirits of those daring to provide housing in the private rental sector?” he asks. “Who knows, but it’s likely to be ill judged and poorly implemented.”