Demand for rental accommodation remains strong despite the broader uncertainty surrounding the economy, it has been revealed.
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The latest survey from the Royal Institution of Chartered Surveyors (RICS) found that demand from prospective tenants rose firmly for the eighth month in a row in September.
With the number of new rental properties being registered with lettings agents continuing to decline, demand is still outstripping supply.
This is good news for landlords, as the survey suggests rents for the coming months are expected to hold strong.
Indeed, letting agents expect rental growth of two per cent in the coming 12 months, rising to three per cent across the next five-year timeline.
Shaun Brannen, a lettings agent in Whitley Bay, Northumberland, said: “Lettings are very strong, just more supply is required.”
The RICS survey also suggested that house buyers are continuing to hold off because of uncertainty around Brexit and the economy. These buyers are choosing to rent instead and see how Brexit pans out before taking a step onto the property ladder.
Jack McKinney, a lettings agent in Glasgow said: “Lettings look to increase due to uncertainty in the long term.”
Tim Pennington of Northallerton Auctions said: “The current policies regarding tax and Stamp Duty are deterring new landlords. The recent legislation is causing rents to rise and are causing a lack of new rentals, further pushing up rents as demand exceeds supply.”
And Paul Oughton, a lettings agent in Cirencester, said: “There has been a seasonal drop off in applicants, but landlord instructions remain buoyant – although this is among existing landlords and not new landlords.”
Properties for sale near record lows
The RICS survey also highlighted that the number of homes for sale on estate agents’ books remains near record lows, with agents suggesting there’s little prospect of a pick-up in the immediate future.
This suggests prospective buyers will be staying in rental accommodation for longer as they wait to find the right property to buy. Again, this seems unlikely to change unless the uncertainty surrounding Brexit is resolved.
Simon Rubinsohn, RICS chief economist, said: “There are good reasons for thinking the latest dip in both buyer enquiries and vendor instructions is a response to the endless wrangling about Brexit…
“However, unless there is a speedy resolution to the on-going impasse it does seem inevitable that the standoff between purchasers and sellers will deepen, making it harder to complete transactions.
“This will not only be a direct hit on the housing market itself but could have ramifications for the wider economy as the normal spend on furniture, fittings and appliances that typically accompanies a house move is also put on hold.”
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