The latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey shows rental demand continuing to grow and outstrip supply.
September saw 22% of respondents showing growing demand, but a further drop in properties listed for rent, with a 29% retreat.
RICS says this trend is further influenced by some landlords listing their properties for sale before potential CGT rises. Unfortunately for renters, the continuing squeeze on supply will likely mean further rent rises and difficulties finding property.
The institution says that nonetheless there appears to be a greater level of positivity in the lettings market, likely connected to recent interest rate cuts by the Bank of England and a growing belief that more will come in the next few months. A potential rise in CGT is also compelling some homeowners to add their properties to the market, however this is unfortunately contributing to a lack of supply for renters.
RICS reports that the sales market continues to pick up. The September 2024 survey found that demand, sales, and new listings had all returned to growth, while sentiment related overall national house price growth for the first time since October 2022. The outlook also looks broadly positive.
Overall demand from buyers recorded a 14% result (net balance), the third month in a row indicating growth. Sales sentiment also saw a rise, although more marginal (5% net balance). Near-term, a net balance of 23% of respondents believes the sales market will continue to grow over the next three months, while longer-term twelve-month growth sentiment is even stronger (45%).
New listings are also up, encouraging a growing demand. This is a clear rise from the previous month’s +9% result, indicating a readily available supply of property for sale. Respondents also cited potential rises in Capital Gains Tax (CGT) encouraging homeowners to list their properties for sale.
Additionally, according to respondents, house prices are growing overall at a national level for the first time in two years, although some regions are seeing less of a rise – West Midlands, the South West and East Anglia. September’s survey posted a 16% national price reading, up from a flat 0% result in August and positive for the first time since October 2022.
RICS president Tina Paillet says: “As we approach the 100-day mark of the new government, it is encouraging to see housing prioritised so strongly. The government has moved quickly to outline ambitious planning reforms and set housing targets aimed at increasing supply. Proposals for new towns, urban expansions, and the creation of ‘greybelt’ land demonstrate a clear commitment to addressing the country’s housing challenges.
“Now, it is crucial for developers and investors to feel confident that these reforms will not create planning, skills and resources bottlenecks, so we can make meaningful progress toward the goal of delivering 1.5 million new homes.”
“RICS survey results continue to highlight the pressures on renters, with demand consistently outstripping supply. While the Renter’s Rights Bill aims to improve standards and offer better protections for tenants, we must ensure that these reforms do not discourage responsible landlords from remaining in the market. Most importantly, the planned changes in the private rental sector fall short of tackling the core issue: increasing supply and making housing more affordable for tenants.”
