The Royal Institution of Chartered Surveyors (RICS) Residential Market Survey for April 2023 has reported a rental market continuing to struggle with a chronic lack of available properties, as the widening supply-demand imbalance continues to place upward pressure on rental values.
The latest survey results from the rental market, reveals that tenant demand has increased in the three months to April, with a net balance of +41%
However, a fall in landlord instructions was recorded over the same timeframe, with a net balance of –24%% of respondents reporting a decline.
With demand continuing to outstrip supply, rental prices are anticipated to be driven higher over the next few months.
Simon Rubinsohn, RICS chief economist, commented: “The imbalance between demand and supply in the letting market still remains stark despite the significant increase in rents.”
Samuel Rees, RICS senior public affairs officer, added: “Demand for rental homes remains high, but stock remains low, and landlords are increasingly exiting the market – which is translating into higher rents.
“The government’s proposed changes in the Renters Reform Bill, while supporting quality and transparency for tenants, will increase pressure on landlords and may force even more to exit the market.
“We are calling on the government to reinstate its housebuilding target to drive supply and give confidence to the market that new homes are coming. Furthermore, the government needs to ensure that proposed reforms to the rental market are delivered in such a way that it increases support for landlords and tenants and maintains and grows supply”.
The fact that landlords are exiting the PRS is reflected by the surge in capital gains tax (CGT) receipts.
Fresh data from HMRC reveals that the taxman collected £18.1bn in CGT in 2022/23, which is £7bn more than two years prior.
Buy-to-let landlords offloading property are behind these increasing receipts.
Sean McCann, chartered financial planner at NFU Mutual, said: “There are several factors behind these huge increases.
“More buy-to-let landlords are offloading property because of increasing mortgage rates and are being hit based on the rise in the value of their property.
“With the value of the average UK property having increased by 75% over the last 10 years, many are facing substantial bills.”
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