RICS warns that rents are to go still higher as demand soars

The latest lettings market survey by the Royal Institution of Chartered Surveyors shows rental demand continuing to rise. 

A net balance of 43 per cent of survey participants saw an increase in tenant demand in the lettings market in September. 

Meanwhile, the feedback around landlord instructions continues to highlight a scarcity of listings becoming available on the rental market.

RICS warns that given this backdrop, rents are expected to be squeezed higher, with respondents pencilling in close to five per cent growth in rental prices across the UK, on average, over the next 12 months.

On the sales side house prices continue to slip.

RICS says that while almost all parts of the UK are witnessing house prices retreat, downward pressure appears most significant across the West Midlands and the South East of England.

Going forward, near-term expectations point to a continuation of prices declining, although at a slower pace. 

Tarrant Parsons, Senior Economist at RICS, says: “With mortgage affordability still incredibly stretched, it is unsurprising that buyer activity across the housing market remained subdued in September. 

“Although the decision to pause monetary policy tightening a few weeks ago provided a glimmer of relief for the market, interest rates are likely now set to remain on hold for a prolonged period. 

“As such, it appears there is little prospect of trends deviating much from the recent picture in the immediate future.

“That said, the outlook a little further ahead has improved slightly, with 12-month sales expectations moving out of negative territory for the first time in several reports.”