South west surveyors expect to see rent rises in the New Year as the number of rental properties coming onto the market fell for the first time since January 2008, says the latest RICS Lettings Survey published today (December 2).
The recent pick up in the housing market seems to have led to a drop off in the number of rental properties, particularly houses, being made available and as a result surveyor optimism has increased for the first time since July 2008.
Nationally 22% more surveyors expect rents to rise rather than fall in the next three months. In contrast to this, south west surveyors are still anticipating a possible fall in rents but the net balance of -6% is an improvement on the -14% of the previous quarter.
The drop off in supply is the main driver for the more positive sentiment, with new instructions reaching their lowest levels in the survey’s history (1998). Across the UK, a net balance of 11% of surveyors are seeing the number of new instructions coming onto the market falling rather than rising, in comparison to a significant fall to 32% of surveyors in the south west.
This is in stark contrast to levels seen late last year when the housing market was still suffering from falling prices and many would-be sellers were turning to the lettings market when their houses failed to sell.
Currently the reading for past rents, although still negative, is the least so since July 2008 with only 4% of chartered surveyors still reporting falling rather than rising rents, indicating that the downward pressure on rents is already starting to ease.
Here in the south west the number reporting a fall was lower than the national average at 20%, an 18 percentage point improvement from the previous quarter.
Demand for rental property is still rising as 16% more surveyors across the UK saw activity over the past three months pick up; in particular demand for houses was robust. Tenant demand was strongest in London, but increased in most other parts of the country, including the south west where 16% more surveyors saw activity increase rather than fall.