Keep knowledgeable with free updates
Merely signal as much as the UK property myFT Digest — delivered on to your inbox.
A dwindling variety of properties coming to the rental market mixed with rising demand is predicted to push up costs for tenants already squeezed by report will increase, in keeping with a carefully watched survey.
Landlord directions, which point out landlords placing properties up for lease, fell to a web stability of minus 29 per cent within the three months to October, in keeping with the Royal Establishment of Chartered Surveyors.
The determine was down from minus 17 within the earlier quarter and the weakest studying since 2021.
The index tracks the distinction between surveyors reporting an enlargement and falls in landlords making their property out there for lease.
Tina Paillet, Rics president, mentioned the information indicated that “renters are feeling the stress from a restricted provide of rental properties and rising rents”.
The Rics index information, launched on Thursday, confirmed that tenant demand was 19 per cent, persevering with the robust set of readings seen for a lot of the previous three years.
The mismatch between provide and demand available in the market led to a web stability of 33 per cent of surveyors anticipating rental costs to rise over the following quarter, indicating robust value development.
She added that the instant enhance in stamp responsibility for landlords buying rental properties, introduced within the Price range, would possibly enhance provide for residence consumers.
However the coverage would additionally “make it tougher to handle the vital scarcity of rental houses”, she mentioned.
Annual lease development peaked at 9.2 per cent in March, the very best tempo since data started in 2015. It marginally eased to eight.4 per cent in September, in keeping with separate official figures printed final month.
Rental value development has been fuelled by elevated demand as extra households turned to the rental market in opposition to a background of more and more expensive mortgages.
On the identical time, landlords are dealing with greater rates of interest and prices, squeezing their income.
Whereas mortgage charges have come down from their peak final summer time, supporting a restoration within the property market, renters are nonetheless beneath stress.
Hire on new tenancies value 30 per cent of renters’ gross earnings in September — the very best since information started in 2017 — in keeping with figures from property information firm PriceHubble printed by the Workplace for Nationwide Statistics in October.
Neil Foster, associate at property company Hadrian Property Companions, mentioned: “Rental inventory continues to dwindle, making use of additional upward stress to lease ranges.
“Fairly the place the ‘ivory tower’ dwellers in Westminster count on most non-public tenants to dwell is a thriller!” he added.
The Rics survey additionally reported that home costs continued to rise, with the corresponding index reporting a web stability of 16 per cent in October — up from 11 per cent in September and nil in August.
Home value development was supported by increasing new purchaser inquiries, with the relative measure exhibiting a web stability of 12 per cent in October, indicating the fourth consecutive month of enlargement.
