The Royal Institution of Chartered Surveyors (RICS) has observed that the residential rents in the UK are expected to grow by 2.7 per cent over the next 12 months owing to lesser number of homes entering the market while the demand continues to climb.
The rental growth is anticipated to accelerate to an average of 4.4 per cent annually over the next five years. It means that the rising rents will further contribute to the housing crisis in the UK as homes have already become unaffordable for a majority, especially in London.
The February 2017 RICS UK Residential Market Survey reinforces the deterioration in the supply of new listings reported in January. In the February survey, 14 per cent more respondents reported a decline in instructions relative to the prior period’s 12 per cent. Tight supply conditions across majority of the regions coupled with stable sales activity has led to a further erosion of available stock for sale, resulting in contraction of the market leading to an increase in rents.
The RICS pointed out that respondents across most parts of the UK continued to highlight in their comments the supply shortage to be very dominant feature of the market at present. If the same trend continues for the next six months, it could deteriorate the rental market from the tenants’ perspective.
New figures show rents predicted to rise by in excess of 20 per cent over the next five years, says RICS