The latest RICS Residential Lettings Survey shows rents are continuing to rise, but at a slower pace.
19% more surveyors reported rents rose rather than fell over the three months to October, but at a slower pace than previously. This says RICS is due to an increase in the amount on property on the market together with a slight decline in tenant demand.
Respondents noted that a lack of mortgage finance is the main reason for the large numbers of people turning to the rental market. However, fears over the economy are also playing a part, with renting seen as a safer option than purchasing a property in the current turbulent economic climate.
The supply of rental property coming onto the market remains unable to keep up with tenant demand, says the report, but new landlord instructions did increase over the same period, rising to a net balance of +10%.
Surveyors expect rents to pick up over the next three-month period, but at a slightly slower pace (the net balance fell back from +32 to +22) given the supply/demand dynamic.
RICS spokesperson James Scott-Lee commented: “The disappointing economic message communicated by the Chancellor in his Autumn Statement and the prospect of further job losses in some sectors and areas over those previously envisaged is likely to continue to underpin the residential lettings market in the near term.
“Indeed, despite a measure of resistance to rising rent levels from tenants, in some parts of the country the imbalance between demand and supply for rented property suggests that for the foreseeable future landlords will have a good if not increasing return on their investments in comparison with other main stream options.”Source: Planet Property