Residential rents in the UK are expected to increase by 15 per cent by 2023, as demand continues to outstrip supply, a latest report from the RICS revealed.

The July 2018 survey by the RICS showed a continued reduction of new property being put on the market in the lettings sector with 9 per cent more respondents seeing a fall rather than a rise in New Landlord Instructions. Significantly, the drop in the number of instructions is evident in virtually all parts of the country to a greater or lesser extent. This is the eighth consecutive quarter in which this indicator has recorded a negative number.

While the supply of fresh rental stock to the market is increasingly constrained, the Tenant Demand indicator remains resilient. The upward momentum appears to have slowed, but the number of tenants looking for a new home remains in positive territory at a headline level, the RICS said.

A major consequence of this imbalance is that expectations for rental growth, and rising rents for consumers, appear to be strengthening again. Over the next 12 months, rents are projected to increase by 2 per cent nationally.

“But the shortfall in supply over the medium term is expected to force a cumulative rise of around 15 per cent in rent by the middle of 2023,” the RICS predicted.

The UK, especially London, continues to remain an attractive proposition for investments in the lettings market.