Rents are forecast to see strong growth over the next five years, according to the latest residential property forecast from the Royal Institution of Chartered Surveyors (RICS).
With demand from tenants gathering pace, at a time when there has been a sharp decline in the number of new properties for renting, the trade body forecasts that national rents will rise by about 15% between now and mid-2024.
With tenant demand continuing to rise, RICS forecasts that rents will increase by around 2% over the next 12 months and about 3% annually over the next five years.
The latest Residential Market Survey by RICS for November shows a net balance of -29% of surveyors reporting a fall in landlord instructions which is twice the negative rating in November 2018.
A separate study recently conducted by the Residential Landlords Association (RLA) found that there has been a sharp rise in the number of landlords exiting the buy-to-let market, which largely explains why there has been a fall in the supply of properties to rent.
David Smith, policy director for the RLA, commented: “If the decline in the supply of new homes to rent continues to fall whilst demand is still rising, this is going to lead to a crisis in some areas as tenants desperately search for somewhere to live. This is all the result of increased taxation and other measures over the last three years and the result has been highly predictable as we said it would be.
“The new government needs to urgently address the problem and make changes in the forthcoming budget to relieve the pressure on landlords and encourage new investment to meet the demand.”