According to a survey reported by Royal Institution of Chartered Surveyors (RICS), UK rests to rise in the next five years by 15% because of the shrinking supply for rental accommodation and demand for tenants continue to grow.
The rents are projected to increase by 2 percent across the country over the next 12 months, the latest survey reveals. According to the details, small landlords are selling their houses amid tax changes the government made and buy-to-let properties became a less lucrative business for small investors. The landlords are being hit by the withdrawal of tax breaks and an extra 3 percent on stamp duty on second homes.
While more and more people are looking to tent the houses because they are not in a position to afford their own houses. The survey results show the falling market of rental properties for the 8th consecutive quarter and its happening across the country, RICS said.
Due to the shortfall in supply of rental accommodation, the rents are likely to climb up by 15 percent by the middle of 2023, South-west England and East Anglia would be affected the most with this change.
Chief Economist at RICS, Simon Rubinsohn said, “The recent tax changes are clearly affecting the buy-to-let market as it was intended. However, the risk is that shortfall in supply will push the rents even higher if the government funded social housing and guild-to-rent programs are stagnant.”
The residential property sales market remains flat but Scotland, North England, Northern Ireland, Midlands, and Wales are witnessing more transactions and price rises.
However, In London, the prices are still falling with 40% balance also south-east and East Anglia are also recording small price declines. Some surveyors told RICS that Brexit negotiations have caused an uncertainty in the market along with increasing interest rates.
According to the data retrieved from HomeLet, average rents in London increased by 3.3% year-on-year basis, in July the average rent of a house in London was £1,615 while in rest of the UK it was 1 percent up to £777.