The Royal Institution of Chartered Surveyors (RICS) Residential Market Survey for April 2023 has reported a rental market continuing to struggle with a chronic lack of available properties, as the widening supply-demand imbalance continues to place upward pressure on rental values.
The latest survey results from the rental market, reveals that tenant demand has increased in the three months to April, with a net balance of +41%
However, a fall in landlord instructions was recorded over the same timeframe, with a net balance of –24%% of respondents reporting a decline.
With demand continuing to outstrip supply, rental prices are anticipated to be driven higher over the next few months.
Simon Rubinsohn, RICS chief economist, commented: “The imbalance between demand and supply in the letting market still remains stark despite the significant increase in rents.”
Samuel Rees, RICS senior public affairs officer, added: “Demand for rental homes remains high, but stock remains low, and landlords are increasingly exiting the market – which is translating into higher rents.
“The government’s proposed changes in the Renters Reform Bill, while supporting quality and transparency for tenants, will increase pressure on landlords and may force even more to exit the market.
“We are calling on the government to reinstate its housebuilding target to drive supply and give confidence to the market that new homes are coming. Furthermore, the government needs to ensure that proposed reforms to the rental market are delivered in such a way that it increases support for landlords and tenants and maintains and grows supply”.
The fact that landlords are exiting the PRS is reflected by the surge in capital gains tax (CGT) receipts.
Fresh data from HMRC reveals that the taxman collected £18.1bn in CGT in 2022/23, which is £7bn more than two years prior.
Buy-to-let landlords offloading property are behind these increasing receipts.
Sean McCann, chartered financial planner at NFU Mutual, said: “There are several factors behind these huge increases.
“More buy-to-let landlords are offloading property because of increasing mortgage rates and are being hit based on the rise in the value of their property.
“With the value of the average UK property having increased by 75% over the last 10 years, many are facing substantial bills.”
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H’mmmmm “With demand continuing to outstrip supply, rental prices are anticipated to be driven higher over the next few months”.
Please , please, please ONLY as long as the tenant affordability is taken into account. While it is normal for a market to peak when it reaches max point that the consumer is prepared to pay, we are seeing more and more tenants so desperate, unscrupulous landlords and have to say irresponsible marketing values by a few agents (note a few, not all) are going over their budgets and those that are left behind in total misery which if this continues will be permanent.
While I agree in a fair and open market. I’m staring to get worried where this is all heading and are we at the point where it is out of control? I predict that rental arrears will escalate in 2024, as will possession orders Sec 8 based on rental demand and affordability over the last six months, let alone a continuing increase. A minority of irresponsible behaviour is likely to have far reaching consequences for our industry such as rent controls linked to rateable value and further tax on landlords.
If you are a good landlord and the majority are, don’t fall for the hype of anything goes rents.
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