Rents Rise - And Will Do For Five Years
Landlords around the country are seeing rents rise because tenant demand is so strong - and this will continue for the next five years.
That's the startling prediction from the Royal Institution of Chartered Surveyors (RICS) with their latest survey revealing that prospective tenant demand has risen for eight months in a row.
Also, the number of new rental homes that are being registered with agents continues to fall, which means demand is still outstripping rental home supply.
This is good news for landlords with the survey also suggesting that rents over the next coming months will remain strong.
Rics says that rental growth is expected to be around 2% over the coming year, then rising to 3% over the next five-year timeline.
Demand for rental properties
In addition, the survey also reveals that demand for rental properties is being fuelled by homebuyers who are putting off buying a property because of Brexit and economic uncertainty.
They told researchers that they are opting to rent to see how Brexit works out before buying a property.
The chief economist at Rics, Simon Rubinsohn, said: "There are good reasons for the latest dip in vendor instructions and buyer enquiries which is a response to Brexit wrangling.
"Unless there's a speedy resolution, however, then the impasse seems inevitable and the stand-off between sellers and buyers will deepen, which will make it harder to complete a transaction."
The issue of demand outstripping supply and rents rising quickly over the coming five years has led to the Residential Landlords Association's policy director, David Smith, stating that the figures from Rics are what they have been predicting.
He said: "The figures demonstrate that because of tax hikes in the sector and the threat to remove Section 21 repossessions without a proper alternative means landlords are not investing in homes to rent, which is leading to demand outstripping supply. This will hurt tenants as they face higher rents and have less choice."
Agents not landlords face unlicensed home prosecution
Meanwhile, it's been revealed that letting agents could be prosecuted instead of landlords for failing to obtain a rental property license.
The warning comes from Kirwans, a law firm, who state that a conviction could lead to an agent receiving a criminal record and a criminal fine.
The firm’s David Kirwan said: "Some councils have made it clear they will go after a managing agent who they deem to be flouting the rules and will not hesitate to prosecute if it's appropriate."
He says that in his opinion, managing agents will come under the licensing legislation which is aimed at those who are managing a property that is subject to a licence as they can also apply for - and be granted - a license rather than the property owner.
