Wild west policy changes are damaging landlord confidenceMake Text Bigger
The August 2019 RICS Residential Market Survey show tenant demand increased for an eighth month in succession, as a net balance of +23% of contributors cited a pick-up (non-seasonally adjusted figures). Set against this, landlord instructions remain in decline, an ongoing trend stretching all the way back to 2016. Given the consistent imbalance between rising demand and falling supply, rents are seen being squeezed higher over the next three months.
Hew Edgar, RICS Head of UK Government Relations and City said: “The ever-changing policy landscape is damaging confidence in the lettings market. But the Private Rented Sector (PRS) has the enormous potential to deliver more homes that are urgently needed, and to contribute to the alleviation of the affordability issues which are being exacerbated by the ongoing dearth of supply across all tenures.
“The need for the regulation of property agents including those operating in the PRS is critical in order to make the sector more attractive to landlords, and of equal importance, enhance the landlord-tenant relationship. To assist this recommended regulation, we are working with industry to develop an approved PRS Code of Practice. We have also worked with Lord Best as part of his Regulation of Property Agents (ROPA) working group, to help bring positive change and increase public confidence in the sector; parts of which have been likened to the ‘wild west.'”
Market Survey results also point to a renewed deterioration in property sales expectations over the near term, with survey respondents predicting a further decline in activity over the three months to come. Brexit uncertainty is unsurprisingly a significant factor causing the hesitation for both buyers and sellers.
Near term sales expectations fell from a net balance of -4% to -23%, representing the poorest return since February this year. Furthermore, sales expectations have weakened in almost all parts of the UK over the past two months. Things are expected to improve, albeit only very modestly, at the 12-month horizon.
As positivity has leaked out of the market, August also saw flat demand from new buyers, after a couple of months where enquiries from potential purchasers had increased somewhat.
In the near term, prices are expected to fall at the national level, with a net balance of -24% of survey participants anticipating a decline over the coming three months (down from -13% last time out). Nevertheless, at the 12-month time horizon, a net balance of +12% of respondents project prices will increase.
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