Rental income set to increase

Rents are set to surge by 15% over the next five years, as a shortage of properties pushes up prices, the Royal Institution of Chartered Surveyors (RICS) has predicted.

The reduction of new property coming to the market last month was the most striking aspect of the market, with 22% more surveyors noting a fall rather than a rise in new landlord instructions. It is the eighth consecutive month of declining supply.

The shortfall will have a limited impact in the short term, raising rents by around 2% nationally, but by 2023 there will be a significant increase in costs for tenants, according to the findings.

The body blamed buy-to-let tax changes for pushing small landlords out of the market and said the fall in instructions was “evident in virtually all parts of the country”.

At the same time, more tenants are looking for a home, the survey showed.

East Anglia and the South West are likely to see the sharpest rental growth.

The impact of recent and ongoing tax changes is having a material impact on the buy to let sector as intended but not as much as first predicted.

The risk is that a reduced pipeline of supply will gradually feed through into higher rents in the absence of either a significant uplift in the Build to Rent programme or government funded social housing.

In the sales market, prices edged up with surveyors suggesting a stronger market in Scotland, Northern Ireland, the north of England, the Midlands and Wales.

In the South East and East Anglia responses suggested small price falls, RICS said.

The average inventory on the books of estate agents is likely to remain close to historic lows.

Lack of supply and affordability remain a lasting problem for those looking to upsize, creating delays in property chains that means moving, whatever your means, can seem out of reach.

If you are looking for a new or re-mortgage please do make contact and one of our advisers will be happy to help.