Rents to increase by 4% in the UK over the next year

Rents to increase by 4% in the UK over the next year

0:04 AM, 14th December 2023, About 11 months ago

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Rents are expected to rise by almost 4% in the next year as the supply of homes to rent dwindles, the latest RICS UK Residential survey reveals.

RICS also reveals that tenant demand is still increasing – but at a slower pace than before.

The research highlights that tenant demand fell in London and the North West.

‘New buyer enquiries indicator finally beginning to stabilise’

RICS’ chief economist, Simon Rubinsohn, said: “The latest survey provides further evidence that sentiment is a little less negative than previously was the case with, critically, the new buyer enquiries indicator finally beginning to stabilise.

“This is being aided by increased confidence that the interest rate cycle has peaked which is reflected in somewhat more competitive mortgage products coming to the market.”

He added: “However, with the cost of money likely to remain elevated for some time to come and the economic outlook still downbeat, it is not surprising that the overall tone to the anecdotal remarks from survey respondents is still quite cautious.”

The housing market outlook has improved

RICS also says that the housing market outlook has improved recently, with a small easing in mortgage rates supporting the improvement in sentiment.

However, sales in the near term are only marginally positive, and that buyer demand is still falling.

However, it is the least negative figure since April 2022.

At a regional level, feedback from those surveyed is mixed regarding new buyer enquiries, with positive readings in both the Northwest and Northern Ireland.

London’s new buyer enquiries have turned less negative, as have other areas such as Wales.

However, Yorkshire and Humber and the North have seen further falls.

Downward trend in sales volumes is easing

For agreed sales, the latest national figures suggest the downward trend in sales volumes is easing.

East Anglia, the North West, and Northern Ireland are all seeing positive figures.

In the near-term, sales expectations over the next three months improved with the first positive reading since early 2022, RICS says.

There has also been a rise in those predicting that sales will improve over the next year.


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