The survey, out today, shows that 42% more surveyors reported rents rose rather than fell in the three months to April. London and the South East saw the largest increases, with rents in some areas reaching unaffordable amounts as an increasing number of renters are priced out of the market.
Home ownership remains unattainable for many would-be buyers and as a result surveyors reported a 35% rise in demand for rental property in the three months to April, the highest level for two years.
New instructions from landlords increased in this three-month cycle, with 6% more surveyors reporting a rise in rental property. Instructions to let flats showed the strongest increase, rising by 6% (compared to a 7% loss previously), whereas houses increased by 2% in the last three months (compared with 5% previously).
Despite an upturn in new instructions, supply to the market is still unable to keep up with demand. Tenants are staying longer, resulting in less availability, while fewer landlords are selling their properties at the end of a tenancy. Just 2.8% of landlords sold property in the three months to April (down from 4%).
Overall rental outlook remains strong, with 33% more surveyors expecting rents to rise rather than fall. Expectations for rental prices were highest in London, followed by the Midlands, the South East and the North.RICS spokesperson James Scott-Lee says: “Although we are beginning to see more mortgages aimed at first-time buyers, many potential homeowners are still restricted from getting a foot on the property ladder, leading to increased demand in an already oversubscribed rental market. There has been a small uplift in supply, but the imbalance between demand and availability can only mean rents will continue to rise.”