RICS predicts rising rents as landlords exit the sector

by Property 118

A week ago

RICS predicts rising rents as landlords exit the sector

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RICS predicts rising rents as landlords exit the sector

From the Royal Institute of Chartered Suveyors (RICS) July 2018 UK residential market survey the most striking feature is the continued reduction of new property being put on the market in the lettings sector with 22% more respondents seeing a fall rather than rise in New Landlord Instructions. This is the eighth consecutive quarter in which this indicator has recorded a negative number.

The decreasing supply means rents are predicted to rise by 2% over the next year and by as much as 15% by 2023. East Anglia and the South West are viewed as likely to see the sharpest growth over the period.

This pattern reflects the shift in the Buy to Let market in the wake of tax changes which are still in the process of being implemented, as smaller scale landlords exit the sector. Significantly, the drop in instructions is evident in virtually all parts of the country to a greater or lesser extent.

Simon Rubinsohn, RICS Chief Economist, said:

“The impact of recent and ongoing tax changes is clearly having a material impact on the Buy to Let sector as intended. The risk, as we have highlighted previously, is that a reduced pipeline of supply will gradually feed through into higher rents in the absence of either a significant uplift in the Build to Rent programme or government funded social housing. At the present time, there is little evidence that either is likely to make up the shortfall.

“This augers ill for those many households for whom owner occupation is either out of reach financially or just not a suitable tenure.”



Comments

...and yet there are rumours that Hammond is thinking of increasing SDLT yet further for private landlords, thus exacerbating the problem of more landlords exiting, leading to ever lower supply rented accommodation and rising rents (because tenant demand is still so strong).
I wonder, are the Conservatives vying to be thicker than Labour when it comes to housing. Or is it the constant turnover in housing ministers that is behind their cluelessness on housing matters? Or is it the clamour to chase votes from GenerationRent? I'm really not sure.

David Lawrenson
http://www.LettingFocus.com
Landlords consultancy.
Author of Successful Property Letting

Ian Simpson

A week ago

Sorry to be a party pooper, but I am seeing the exact opposite.
I am seeing LESS demand for rentals, and MORE voids, and existing tenants asking for reductions in rent or moving to somewhere cheaper. There is also a massive supply of rental flats in Camberley, Surrey, where many of my properties are, and even agents are getting little interest.
I have never had voids in my portfolio of five HMOs , and nine standalone properties until this year.... we used to get 5-10 enquiries for a room within an hour of it being advertised, now if we get 2-3 a week it is good.

Where have all the tenants gone..?

Monty Bodkin

A week ago

Reply to the comment left by Ian Simpson at 11/08/2018 - 14:25
"There is also a massive supply of rental flats in Camberley, Surrey"

I'm sure you know best Ian but there are only 68 showing as available on Right Move.
And most flats seem to be 'let agreed' within the usual month's notice period.
Maybe it's just the HMO market?

Reply to the comment left by Ian Simpson at 11/08/2018 - 14:25
It could be time of year, Ian?
We find July and Aug also late Nov and December v quiet and hard to get places let..
My places in London and NW Kent, mainly

Kind regards
David Lawrenson
http://www.LettingFocus.com
Private Rented Consultancy


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