Fierce competition pushing rent prices higher as house sales remain ‘sluggish’ | UK News

Fierce competitors for rented properties is squeezing costs larger, whereas home gross sales stay sluggish, analysis by surveyors has discovered.

Tenant demand reached a five-month excessive amid a “frenzied” lettings market, the Royal Establishment of Chartered Surveyors (Rics) mentioned.

However the variety of new properties out there has declined, resulting in a provide and demand imbalance that would see rents pushed even larger.

The proportion of surveyors who mentioned they count on rents to rise within the subsequent three months jumped to 59%, up from 45% within the earlier month’s survey, and nearing the highs seen towards the beginning of final 12 months.

All elements of the UK are set to see a rise in lease costs within the 12 months forward, professionals mentioned.

One property skilled, primarily based in Hexham, mentioned: “Frenzied is presumably the perfect phrase to sum up the rental market. Fierce competitors for too few homes; a direct consequence of years of ill-judged authorities coverage within the non-public rented sector.”

One other, primarily based in Yorkshire and the Humber, mentioned: “A few of our buy-to-let landlords are contemplating exiting the market. Tenant demand is robust, so it means that elevated prices, taxes, and admin burden is taking its toll.”

Falling demand for homes

It comes as new home purchaser demand fell for the eleventh month in a row in March.

One skilled, primarily based in Yorkshire and the Humber, mentioned the market stays “sluggish” and “many consumers are sitting on their arms merely watching the market”.

One other mentioned gross sales have began to select up after mortgage charges had not risen as excessive as predicted final 12 months.

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Sarah Coles, head of private finance at Hargreaves Lansdown, mentioned: “Issues will not be as grim as we would feared six months in the past, however purchaser demand has been dropping for one of the best a part of a 12 months, so if you are going to promote, it is advisable enter the market with clear-eyed pragmatism.”

Simon Rubinsohn, Rics’s chief economist, mentioned the general tone of suggestions from surveyors was “nonetheless one among warning” over the gross sales market.

He mentioned: “Offers are being finished, however a theme coming via within the anecdotal remarks is the necessity for distributors to recognise the shift in market dynamics.”

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Mr Rubinsohn added: “Considerably, there may be additionally a way that the medium-term outlook is wanting a bit of extra settled, helped by the notion that the rate of interest cycle could also be close to the height.”