Monday, March 4, 2024
HomePropertyCost of renting will continue to 'rise sharply', warn lettings agents

Cost of renting will continue to ‘rise sharply’, warn lettings agents

There is no end in sight for rising rents despite costs reaching record levels, lettings agents have warned.

The latest survey of agents from the Royal Institution of Chartered Surveyors found that tenant demand rose in the three months to July.

Of those surveyed, 54 per cent of agents said they had seen an increase in rents during that period. 

It is the strongest quarterly pick-up in rental demand since the beginning of last year.

It follows separate research showing the average cost of rent in England has reached a record £1,367 a month per property.

The outlook for the rental market has been described as 'concerning' by rental experts The outlook for the rental market has been described as 'concerning' by rental experts

The outlook for the rental market has been described as ‘concerning’ by rental experts

Simon Rubinsohn, of Rics, described the outlook for the lettings market as ‘concerning’.

He said: ‘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.’

In the Rics survey, 54% of agents said they had seen rents increase in the three months to July In the Rics survey, 54% of agents said they had seen rents increase in the three months to July

In the Rics survey, 54% of agents said they had seen rents increase in the three months to July

As demand continues to rise, the supply of properties available to rent continues to decline.

Rics said the number of landlords instructing agents declined once again, with 30 per cent of agents saying they had seen a decrease, compared to from a decline of 24 per cent the previous month. 

And a net balance of 63 per cent of respondents expected rental prices to increase in the next three months.

It is up from 55 per cent in the previous quarter and marks a record high.

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Share 61 shares Rics said landlord instructions declined, with the latest net balance falling to 30% Rics said landlord instructions declined, with the latest net balance falling to 30%

Rics said landlord instructions declined, with the latest net balance falling to 30%

Will Ravenhill, a lettings agent in Leicester, said: ‘The rental market is broken. Many buy-to-let landlords are leaving the market.

‘Those that remain who have buy-to-let mortgages are increasing rents to ridiculous levels to adhere to their mortgage covenants.’

Kevin Burt-Gray, a lettings agent in Cambridge, said: ‘Shortage of stock and a surplus of quality tenants is keeping the private rental sector busy, with multiple applications being received on most properties within a few days of them coming on to the open market.’

And David Martindale, a lettings agent in Wakefield, added: ‘There continues to be good demand for rental properties and rents are continuing to rise.’

Shortage of stock and a surplus of quality tenants is keeping the private rental sector busy Shortage of stock and a surplus of quality tenants is keeping the private rental sector busy

Shortage of stock and a surplus of quality tenants is keeping the private rental sector busy

A net balance of 63% of survey respondents expected rental prices to increase in the next three months A net balance of 63% of survey respondents expected rental prices to increase in the next three months

A net balance of 63% of survey respondents expected rental prices to increase in the next three months

It follows separate research by Goodlord at the beginning of this month that said rents in England have reached a record high.

It said rents had soared 19 per cent in a month, with prices being pushed up by students seeking accommodation for the new university term.

The fiercely competitive rental market has seen the average cost of rent in England reach £1,367 a month per property.

It is the highest level ever recorded by the index and is 9.4 per cent higher than the previous record set in September last year, at £1,249.  

Harriet Scanlan, of Richmond estate agency Antony Roberts, explained: ‘We are still in the thrust of a very strong rental market.

‘At the start of this week we listed three properties for rent – and within two days, we had received multiple offers from prospective tenants on each property.

‘Two of those landlords received well over asking price at best and final offering point.

‘We don’t relish in having to disappoint unsuccessful applicants and understand the difficulties in trying to find a new rental home in this highly-competitive market.’

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