Rental costs are up but house sales sluggish

Fierce competition for rented properties is squeezing prices higher in a "frenzied" lettings market, while housing sales remain downbeat, research by surveyors has found.

Tenant demand reached a five-month high with strong demand seen across the country, the Royal Institution of Chartered Surveyors (Rics) said.

But the degree of new landlords to instruct properties declined, leading to a demand and supply imbalance that means rents could be pushed higher.

The proportion of surveyors who said they expect rents to rise in the next three months jumped to 59 per cent, up from 45 per cent in the previous month's survey, and nearing the highs seen toward the start of last year.

All parts of the UK are set to see an increase in rent prices in the year ahead, professionals said.

The research is a monthly sentiment survey, by Rics, of chartered surveyors who operate in the UK's residential sales and lettings markets.

It also collects the views of property professionals alongside the survey.

One, based in Hexham, said: ‘Frenzied is possibly the ideal word to sum up the rental market.

‘Fierce competition for too few houses; a direct consequence of years of ill-judged government policy in the private rented sector.’

Another, based in Yorkshire and the Humber, said: ‘Some of our buy-to-let landlords are considering exiting the market. Tenant demand is strong, so it suggests that increased costs, taxes, and admin burden is taking its toll.’

Meanwhile, new house buyer demand fell for the 11th month in a row in March, Rics found.