Soaring tenant demand in the private sector is coming from people on benefit.
The latest RICS quarterly rental survey, covering the quarter to the end of July, says that 13% of all new lets were to housing benefit tenants. The statistic is up from 8% the previous quarter and is the highest since the RICS began its surveys in 1999.
Overall, new tenant demand again outpaced supply of rental property in the three months to July, as more people continued to turn to the lettings sector.
As a result of this, rents continued to increase, although the survey indicates that the pace of growth moderated slightly.
However, the imbalance between demand and supply is likely to persist, suggesting that further gains in rents are likely over the coming months.
The number of new landlords continue to edge upwards, albeit only modestly.
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 spokesman 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.”
Comments
Surprised RICS members are requiring to take Benefit tenants in the current market. It actually shows where the market is, and many landlords who have stayed away from HB may need to reconsider strategy and rember about benefit caps in the future
With such high demand, those on benefits are even more disadvantaged. It was never easy for them and recent government policies have compounded the problems.