Rents across the UK could increase again in the coming months as more landlords leave the rental market, according to the latest market snapshot from Royal Institution of Chartered Surveyors.
The report suggests that around 20% of letting agents expect rents to rise within the next three months, largely due to ongoing supply pressures in the private rented sector. While tenant demand has remained relatively stable over the winter period, the number of properties available to rent continues to fall.
A key factor behind the limited supply is the continuing trend of landlords selling their properties. With fewer landlords bringing new homes onto the rental market, letting agents say the imbalance between supply and demand is likely to place upward pressure on rents.
The survey conducted by RICS is based on the views of property professionals across the country and reflects overall sentiment within the industry rather than confirmed market data. Many respondents indicated that confidence in the private rented sector remains cautious, particularly as the Renters’ Rights Act approaches implementation.
Landlords Continuing to Leave the Sector
Several agents contributing to the survey pointed to the growing number of landlords choosing to exit the market.
John Chappell, from Chappell & Co in Skegness, noted that the ongoing sale of rental properties is continuing to reduce available housing stock. According to him, tenant demand remains strong and rents are rising as a result.
However, he also highlighted another emerging issue: more rental applicants are struggling to pass credit checks and affordability assessments. This could lead to increased use of landlord rent insurance, which may add extra costs for tenants.
Shrinking Supply Driving Prices
Richard Franklin of Franklin Gallimore in Tenbury Wells also pointed to the reduction in available rental homes as a major factor behind rising rents.
He suggested that continued regulatory changes and pressures on landlords are discouraging investment in the buy-to-let market. In his view, stricter regulations intended to improve the sector may unintentionally reduce the supply of rental housing.
As landlords sell their properties, the number of homes available to rent declines. This shrinking stock naturally leads to stronger competition among tenants, pushing rental prices higher.
Renters’ Rights Act Influencing Landlord Decisions
Other agents believe that the approaching introduction of the Renters’ Rights Act is encouraging some landlords to sell properties once tenancies end or come up for renewal.
Jeremy Leaf of Jeremy Leaf & Co in north London explained that many landlords appear to be reviewing their investments ahead of the legislation coming into force. As a result, fewer properties are being re-listed for rent, leaving tenants with fewer options in the market.
This reduced level of choice has helped keep rents at elevated levels, even while the broader cost-of-living pressures affecting tenants remain a concern.
London Market Also Feeling the Pressure
The same trend is being seen in parts of London. William Delaney from Coopers of London said that many landlords are continuing to leave the rental sector and sell their properties once tenancies end.
He suggested that a combination of government policies, new regulations and relatively limited capital growth in some areas has made rental property investment less attractive for certain landlords.
Government Policies Under Scrutiny
Some industry voices believe recent policy changes are contributing to the shift in the rental market. Kevin Henry of Bridgemane Surveyors in Southport summarised the issue simply, suggesting that government measures affecting the private rented sector are likely to result in higher rents across the market.
Sales Market Facing Separate Challenges
While the rental market faces supply pressures, the wider property sales market is also experiencing some uncertainty. The RICS report suggests that global events, including the Iran–Israel conflict, are already influencing economic confidence.
Some surveyors reported a relatively positive start to the year, but overall market confidence weakened during February as concerns about inflation, interest rates and global instability increased.
Buyer Demand Slips Slightly
The latest figures show that new buyer enquiries declined further in February, with the net balance falling to -26%, compared with -15% in January.
The number of agreed property sales also remained subdued, with a net balance of -12%, indicating that fewer surveyors reported an increase in completed transactions.
Short-term sales expectations have also softened slightly, with the near-term outlook registering a balance of -2%.
Longer-Term Outlook Still Positive
Despite the slower start to the year, the longer-term outlook for the housing market remains more encouraging.
RICS reports that 17% of respondents still expect sales activity to increase over the next 12 months, suggesting that many professionals believe the market will strengthen again once current economic uncertainties ease.
House Prices Remain Stable
At a national level, house prices remained broadly stable during February. The RICS price balance registered -12%, only slightly weaker than the previous month.
This suggests that although demand has softened in the short term, property values have so far remained relatively steady across much of the UK.
Rental Market Likely to Tighten
Overall, the survey points to a rental market that may continue to tighten in the coming months. With fewer landlords entering the sector and many choosing to sell properties instead, the supply of rental homes is unlikely to increase significantly in the short term.
If tenant demand remains stable or rises as the year progresses, this imbalance between supply and demand could result in further rent increases before the summer period.
For tenants, this means competition for available homes may intensify, while landlords who remain in the sector could continue to see strong demand for their properties.
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