The latest RICS housing report has revealed a sharp downturn in property sales but in contrast a rental market bolstered by continuing ‘strong demand’, landlords will be relieved to hear.
While those selling homes are seeing demand for properties evaporating fast as high mortgage interest rates dent buyer confidence, those offering properties to rent have seen demand rising firmly over the three months to July.
RICS says this points to the “strongest quarterly pick-up in rental demand since the start of 2022”.
Set against this, the number of landlords asking agents to list properties to rent declined for another month in a row.
This is good for landlords profitability as fewer properties on the market lead to higher rents, but it will lead to further headlines that the market is ‘broken’ as more and more house hunting renters are asked to pay higher and higher rents.
Consequently, more agents have told RICS they expect rents to rise over the coming months than during the last quarter of the year, the report shows.
Constrained
RICS Chief Economist, Simon Rubinsohn (pictured), adds: “The recent uptick in mortgage activity looks likely to be reversed over the coming months if the feedback to the latest RICS Residential Survey is anything to go by.
“Just as concerning are the insights being provided around the lettings markets.
“Demand shows no signs of letting up, supply remains constrained and that means rents are likely to continue rising sharply despite the cost-of-living crisis.”
The Homelet rental report, also published today, reveals that the UK monthly rent has hit an all-time high of £1,243 PCM, up 1.1% from last month, or £1,032 excluding London.
