The latest lettings market snapshot from the Royal Institution of Chartered Surveyors suggests tenant demand is rising further with a net balance of 50 per cent of agents reporting a rent increase in the past month alone.

Alongside this, the latest net balance for landlord instructions showed a 13 per cent drop; RICS reports that “falling supply across the rental market [has been] an ongoing theme over much of the past five years.“

In the light of this RICS forecasts rents to continue rising this year and by around four per cent over the course of 2023.

On the sales side, RICS senior economist Tarrant Parsons says: “Concerns over the economic backdrop and rising interest rates continue to take their toll on market momentum, with strong activity early in the year now giving way to a more subdued picture. Moreover, given projections for the UK economy point to a potential recession emerging towards the end of 2022, respondents envisage housing sales continuing to slip in the coming months. 

“For the time being at least, the lack of stock available on the market is still providing support to house prices, which continue to rise, even if the pace of growth has cooled over recent months.”

The institution’s snapshot reports that homebuyer enquiries fell in August at the steepest rate since the early stages of the pandemic as the cost-of-living crisis and wider economic challenges impacted the market.

Although house prices continued to rise across the UK enquiries, sales and new instructions all dropped at sharper rates than in the previous month. 

Sales rates have now fallen for five consecutive months, “with the latest feedback implying this downward trend is becoming further entrenched” according to the institution.

Sales predictions for the three months ahead also slipped further into negative territory, and 12 months ahead, sales expectations are the most downbeat they have been since 2012. 

In terms of supply, the continued lack of homes coming onto the market is illustrated by the new instructions indicator falling to its lowest level this year. This pushed average stock levels on estate agents’ books to an all-time low of 34 homes per branch.