The latest Royal Institution of Chartered Surveyors housing market snapshot has a concise summary of the lettings sector – it “remains under pressure.”

The sentiment index produced by RICS shows that in May tenant demand rose, with a net balance of +14% of contributors to the monthly survey reporting an increase.

Meanwhile landlord instructions remained firmly negative at -28%. 

Rent rise expectations also strengthened, rising to +36%, the highest reading since May last year.

Meanwhile the survey also has sobering assessments of the sales sector.

Agreed sales remained subdued, posting an unchanged net balance of -37%. 

Although this shows that more respondents are still seeing sales fall rather than rise, the unchanged reading suggests the pace of decline is no longer intensifying.

However, transactions are taking longer to complete. 

The average time from listing to completion rose to 21.5 weeks, the longest duration recorded since the dataset began in 2017.

House prices continued to edge lower at the headline level, with the net balance holding at -35% for the second consecutive month. 

Respondents in the South East and East Anglia reported more pronounced downward pressure on prices, while Northern Ireland continued to see firm price growth.

Looking ahead, RICS says short-term sentiment remains cautious. 

Price expectations remain weaker in the near term, with a net balance of -45% expecting prices to fall over the coming three months. 

However, expectations for the year ahead edged into positive territory at +6%, suggesting some respondents see conditions improving further out.

Tarrant Parsons, RICS Head of Market Research and Analysis, says: “The latest survey data suggest the recent downturn in activity may be beginning to stabilise, with several key indicators broadly holding steady. However, as they remain in negative territory, it would be premature to interpret this as the start of a recovery.

“The decline in consumer price index inflation to 2.8% in April provided some temporary relief, but the Bank of England has signalled that further inflationary pressures are likely as higher energy costs continue to pass through. 

“Against this backdrop, the prospect of further rate rises cannot be dismissed, and until there is greater clarity, market sentiment is likely to remain fragile.”