Demand for UK rented properties falls for first time since pandemic

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UK tenant demand fell for the primary time final month because the early pandemic interval with property brokers forecasting the slowest tempo of hire rises in nearly 4 years, in an indication that pressures on squeezed households might be peaking.

Demand for rental properties declined to minus 2 in November, down from 17 in October and the primary detrimental studying since Could 2020, in line with a survey of property brokers by the Royal Establishment of Chartered Surveyors.

The index, revealed by the skilled physique on Thursday, tracks the distinction between surveyors reporting an growth and a decline in tenant demand to provide a web stability.

Rics’ separate measure of rental value expectations within the subsequent three months, a stability of brokers anticipating rises and falls, stood at 29 in November, down from 32 the earlier month and the bottom since January 2021.

Landlord directions, which point out properties being put up for hire, continued to fall at minus 13, however the studying was decrease than the minus 30 registered in October.

Jeremy Leaf, principal at London property company Jeremy Leaf & Co, mentioned: “Demand and hire ranges have eased in response to affordability considerations, significantly for these properties the place the will increase have been beforehand the furthest and quickest.”

Surging rental costs have hit family funds exhausting over the previous two years as robust demand from households that would not afford to purchase a property clashed with a restricted inventory of dwellings.

Official knowledge final month confirmed that common personal rents rose by 8.7 per cent in the 12 months to October, up from 8.4 per cent within the yr to September and simply shy of the document 9.2 per cent registered in March.

The slowdown in tenant demand reported by Rics got here as property brokers mentioned home costs continued to extend, even when gross sales remained broadly steady.

The web stability of the index monitoring home costs was 25, up from 16 in October, marking the fourth consecutive improve and additional cementing the upward trajectory of home value progress because the summer time.

Some brokers attributed a gentle movement of recent purchaser enquiries, for which the index was constructive at 12, to the upcoming improve in stamp responsibility.

Chancellor Rachel Reeves’ determination to finish the short-term vacation on the property levy within the Price range means first-time patrons, for instance, will begin paying stamp responsibility for properties price £300,000 or extra as an alternative of £425,000 from April 2025.

Stanley Shaw, of property company Mervyn Smith, mentioned: “There’s a mini bounce of patrons, particularly youthful first timers, trying to purchase earlier than the stamp will increase subsequent April, however it’s not a stampede.”