Demand from tenants has again outpaced supply of rental property in the three months to July, says the latest RICS Residential Lettings Survey.
Rents have continued to rise as a result, although the rate of growth has eased slightly, with 34 per cent more surveyors reporting a rise in rents rather than a fall (compared with 42 per cent in the previous three month period).
The survey also suggests that the imbalance between demand and supply will persist, which is likely to result in further gains in rents over the coming months.
The strong demand for rental property continues to be driven by frustrated buyers who have struggled to find mortgage finance, and first-time buyers unable to meet lenders’ deposit requirements.
As a result, 25 per cent more chartered surveyors reported a rise in demand than a fall.
The challenging economic situation is also leading to more tenants relying on help from the government.
Social lettings are now at their highest level since the series began in 1999, at 13 per cent of all new lets (up from eight per cent).
However lettings to private renters continue to make up the majority of lettings, at 66 per cent.
New landlord instructions – which indicate the flow of rental property coming to the market – continue to edge upwards modestly, with just five per cent more respondents reporting a rise in new instructions than a fall.
Surveyors report that where tenancies are coming up for renewal, some landlords - particularly those in London and the South East - are now choosing to put their properties on the sales market, leaving fewer rental properties available.
RICS spokesperson James Scott-Lee said, "The combination of strong tenant demand and a limited stock of good quality properties on offer is pushing rents ever higher across much of the country. This is the case both for houses and flats. Moreover, with mortgage finance for first time buyers likely to remain in short supply for some time to come, this imbalance is set to persist. The inevitable outcome is that rents will continue to increase."
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