Landlords continue fleeing PRS as tenant demand rises

Landlords continue fleeing PRS as tenant demand rises

0:01 AM, 11th May 2023, About 12 months ago

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Tenant demand in the first three months of the year rocketed by 41%, but fewer rental properties came onto the market, a survey reveals.

The Royal Institution of Chartered Surveyors (RICS) residential market survey for April found that 24% of members saw fewer landlord instructions.

And RICS says that with demand continuing to outstrip supply, rent prices will increase over the coming months.

‘Challenges in both the sales and lettings space’

Simon Rubinsohn, RICS’ chief economist, said: “The newsflow around housing does appear to have steadied over the past month, key indicators from the RICS survey point to a series of challenges in both the sales and lettings space.

“The imbalance between demand and supply in the letting market still remains stark despite the significant increase in rents.”

He added: “Critical to addressing both areas of the market is the delivery of more supply.”

‘Supply of affordable housing for owners and renters’

The organisation’s senior public affairs officer, Samuel Rees, said: “The supply of affordable housing for owners and renters continues to be a prominent issue in our latest residential market survey.

“RICS are also increasingly concerned about the pressures facing the rental market.”

He adds: “Demand for rental homes remains high, but stock remains low, and landlords are increasingly exiting the market – which is translating into higher rents.”

‘Those trapped in the rental market’

Sarah Coles, the head of personal finance at Hargreaves Lansdown, said: “For those trapped in the rental market, there’s no let-up in the relentless squeeze.

“We have seen yet another month of growing demand and dearth of properties to rent, which is pushing rents sky high.

“Agents say landlords are leaving in droves – not just because of increasing tax and legislation, but because rising mortgage rates and the cost of maintaining the properties just doesn’t add up for an awful lot of them now.”

Homebuyer demand has fallen

RICS also highlights that homebuyer demand has fallen for 12 consecutive months.

It also says that the number of agreed sales and house prices were also down with fewer properties coming to the market and fewer being appraised – so supply will remain sluggish.

Ms Coles said: “The green shoots of optimism in the property market risk being crushed by cruel reality.

“Demand has now fallen every month for the past year, and with sales dwindling and house prices dropping, it’s proving more difficult to shift properties.”

She added: “It’s taking almost 20 weeks from first listing to final completion, as cautious buyers guard against hasty decisions.”

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