Tenant demand grows as landlord instructions decline

Tenant demand grows as landlord instructions decline

0:03 AM, 15th March 2024, About 3 months ago 3

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The lettings market continues to see high tenant demand, albeit at a slower pace – but a dwindling number of landlord instructions means there’s a shortage of rental properties.

The latest Residential Survey by the Royal Institution of Chartered Surveyors (RICS) says this imbalance is expected to push rents up in the coming months.

RICS’ chief economist, Simon Rubinsohn, said: “Although there are signs that the relentless surge in private rents is losing momentum, fresh demand still outpaces supply.

“This leaves little room for significant relief for tenants.”

Optimistic picture for property sales

The RICS survey also paints an optimistic picture for property sales compared to most of last year – and warns that the easing of mortgage rates may stall amid uncertainty about interest rate reductions.

At the national level, new buyer inquiries have remained positive for the second consecutive month, indicating sustained buyer demand.

Across various UK regions, buyer interest has rebounded over the past two months.

However, agreed sales remained flat in February but this still represents a stronger trend than observed in most of the previous 12 months.

RICS says that sales expectations for the near term remain positive, with sales activity expected to gain momentum over the coming year.

‘Yet more bad news for first-time buyers’

Sarah Coles, the head of personal finance at Hargreaves Lansdown, said: “If this is the dawn of a new age of optimism, it’s a boon for sellers, but yet more bad news for first-time buyers, who will have to wrestle with even more price rises at a time when mortgage rates are still significantly higher than they were.

“The answer for many, unfortunately, is that they will need a bigger deposit.”

Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: “The findings of the latest RICS survey chime with some of the other ‘push-me-pull-you’ reports seen recently. One month up a bit, the next down a bit – it’s a pattern likely to be repeated over the next few months.

“In our offices, we noticed considerable hesitation among buyers and sellers as the Budget approached.

“Many were hoping for a few goodies to be thrown their way, which would have made the whole process more financially attractive.

“However, the Budget has been and gone with precious little to incentivise as the Chancellor probably hopes that growing optimism means he had no reason to further stoke demand.”


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Comments

Mr Blueberry

17:03 PM, 15th March 2024, About 3 months ago

I have worked in the Corporation of London, Westminster Council and dozens of other Councils for over 40 years and to be honest I am at a loss as to what the Chancellor and Michael Goves affordable housing strategy and end game is and whether they have sought objective advice on policy outcomes?

AnthonyJames

22:56 PM, 15th March 2024, About 3 months ago

I listened to an interview with Angela Rayner on the Today podcast and Labour hasn't thought its policies through either. Her approach is bull in a china shop for the PRS and social sector, with landlords and developers always eternally Bad, and councils and housing associations presumably always Good. She basically wants to force through banning S21 and every other pro-tenant policy going, and call landlords' bluff. No sign that Labour has even considered what to do if landlords respond by continuing to flee the sector and rents and homelessness accelerate even more. She would just blame landlords for supposedly causing the crisis and perhaps take the catastrophic SNP approach of rent controls.

On the new-build side Labour's policy is all about Having A Plan, this time neighbourhood plans and New Towns, which will be divvied up to the big builders in exchange for non-negotiable S106 and CIL taxes, irrespective of economic viability. Nimbys will be steamrollered via planning appeals or easily bribed (she thinks) with loads of free infrastructure paid for by Big Bad Developers, Public Enemy Number 1.

All other development outside the "Plan" agreed by the "Community" is in her eyes merely speculative and irredeemable, so there's no hint of encouragement for small developer-builders (whose numbers and build rates have collapsed since the GFC), to help create a more competitive market and greater overall investment and build rates. Ditto no mention of self-builders, who could really boom in numbers if only they were given a sniff of a chance in the planning system, or sites for them were made into a compulsory part of larger planning applications. So, what will Labour do if they keep playing chicken solely with the Big Developers, and the latter say "fine, impose your S106 and CILs and expect us to pay for roads, schools, shops, everything, but we've decided to back out of building new towns X, Y and Z - there's insufficient margin for our shareholders and development financiers, so we are going to cherry pick and drop our build rates"?

Mr Blueberry

23:19 PM, 16th March 2024, About 3 months ago

Yes Anthony, there is little thought or consideration given should the government's housing policies fail. The proposed new RRB will be no exception to a litany of previous failures e.g. the bedroom tax introduced to make small families in big houses move to smaller ones - the idea'scgood but the executed failed; as did the poll tax, rent caps in Scotland failed; and most spectacularly the hypocritical Right to Buy fiasco where millions of rental homes have been lost and slowly sold to the middle classes leaving none for the poor while successive governments benefitted by £47billion. So housing policy failures are common and the present day decline in landlord instructions are a clear sign that muddled, inconsistent long drawn out housing policies are leading to a tipping point where imminently millions of landlords will sell as they can achieve a higher income by just leaving their money in a high street bank. The government's notion that all sold rental properties will be snapped up, improved to EPC C standards and rented out a cheaper rate by other private or corporate landlords is an optimistic assumption that simply will not happen.

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