RICS: Rents set for more increases

The cost of renting is set to continue rising sharply thanks to the gap between supply and demand, says RICS chief economist Simon Rubinsohn.

The majority (63%) of the surveyors expect rents to go up again in the coming three months, the RICS residential market survey for July says.

This is the highest percentage expecting an increase since the data started being collected in 1999.

Rubinsohn said: “Demand shows no signs of letting up, supply remains constrained and that means rents are likely to continue rising sharply despite the cost of living crisis.”

Private rents rose by 5.1% in the 12 months to June 2023, government data shows.

Tom Bill, head of UK residential research at Knight Frank said: “Landlords have left the sector in recent years due to extra red tape and costs as they became a politically expedient target for the government.

“The unintended consequence has been more financial pain for tenants as the supply of rental properties falls and rents rise.

“Higher mortgage rates have compounded the problem which means the squeeze on tenants won’t vanish in the short term.

“That said, supply has risen in some areas as owners who have failed to sell for the asking price choose to let out their property until there is more momentum in the sales market.”