Rents will continue rising thanks to increased demand combined with dwindling interest from landlords, the RICS UK Residential Survey has found.
An +18% net balance of surveyors saw tenant demand rise this past month, while sentiment towards landlord instructions stood at a net -16%.
Simon Rubinsohn, chief economist at RICS, said: “Demand is continuing to run ahead of supply with many respondents to the RICS survey noting that landlords are looking to reduce holdings in the face of an increasingly hostile environment for investment in the sector.”
Sarah Coles, head of personal finance, Hargreaves Lansdown, said: “For renters… the picture grew bleaker, with tenant numbers rising again, and landlords disappearing at an even faster rate.
“The prospects for renters could get even tougher in the coming months if buy-to-let landlords take fright at rumours of a possible capital gains tax hike.
“If Rachel Reeves boosts the CGT rate to match income tax, a property investor who pays higher-rate tax would see their tax bill rise by two thirds when they come to sell.
“This could encourage more landlords to sell up before any potential change comes in, cutting the number of rental properties again.”
In terms of home sales, the past month saw evidence that more people are coming to market, as there was a 2% pickup in new buyer enquiries, up from -6% last month.
Some +30% of respondents predict sales rising over the next three months, which is the most positive sentiment since January 2020.
Rubinsohn added: “The new government’s focus on boosting housing development alongside the recent quarter point base rate cut does appear to have shifted the mood music in the sales market, with projections for both near and medium activity picking up according to the latest RICS Residential Market Survey.
“Inevitably, significant challenges lie ahead in delivering on the ambitions around planning reform and it is far from clear that the Bank of England will follow the August move with further easing over the coming months, but, even so, the policy mix is becoming more supportive for the sector.”
UK-wide house prices seem to be still decreasing, as a -19% next balance saw them fall.
