Tenant demand is increasing while landlord instructions are dwindling, raising expectations of rent increases in the months ahead, the RICS UK Residential Survey has found.
A net +25% of property professionals expect rent increases in the next three months.
Tenant demand increased in the three months to April, according to a net +14%, up from +3% in January.
Meanwhile new landlord instructions declined by a net -26%, down from -19% in the previous RICS survey.
Simon Rubinsohn, chief economist at RICS, said: “With demand continuing to grow, there appears little relief in store for tenants in terms of the upward pressure on rents.
“Critically, even with the rise in the build to rent to sector the shortall of affordable rental stock looks set to remain substantial.”
Landlord experts are blaming the upcoming Renters’ Rights Bill on dwindling landlord numbers.
The Bill is set to abolish Section 21 evictions, introduce periodic tenancies, and introduce a minimum homes standard.
It’s expected to come into force shortly after the summer months.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: said: “Over the past month or so, we have noticed considerably more tenant interest but a resistance to paying higher rents.
“However, lack of supply, particularly of one and two bedroom flats in more popular areas, often prompted by landlords deciding not to renew, is preventing a more marked downturn in values.
“Looking forward, we do not expect much improvement in stock shortages, particularly as the Renters’ Rights Bill nears the statute book so the imbalance with demand is likely to continue.”
Tom Bill, head of UK residential research at Knight Frank, said: “The unintended consequences of the Renters Rights Bill are becoming more apparent as supply gets tighter.
“A piece of legislation designed to protect tenants may ultimately push rents higher as some landlords decide to sell. Together with tougher green regulations and higher mortgage costs, it means the choice for tenants is narrowing.”