Rics expects oversupply to hit rents

Permalink: Rics expects oversupply to hit rents
by Gill Montia

Predictions that the rental market will be flooded by properties coming onto the market because their owners are reluctant or unable to sell, are borne out by figures from the Royal Institutions of Chartered Surveyors (Rics).

According to the latest Rics survey, in the three months to July, 43% more members saw a rise in potential sellers choosing to let, compared to those who saw a fall.

The rise was the steepest since the survey began over a decade ago and was accompanied by the sharpest increase in tenant demand since 1998.

During the quarter, 37% more chartered surveyors reported an increase in lettings than those who saw a fall.

The figure compares with a positive balance of 30% during the previous quarter.

Forty three per cent more surveyors reported a rise than a fall in the local demand for rented houses, compared with 34% in the demand for flats.

Rents continued to rise during the quarter and landlord confidence peaked, with a record low 2.1% selling properties at the end of rental agreements.

However, Rics members expect rents to fall in the months ahead because of an oversupply of homes to let.

House sales are around 50% below this time last year and are expected to fall even further and so called “forced landlords” include not only homeowners but housing developers whose sales offices have become eerily quiet.