The latest lettings survey from the Royal Institution of Chartered Surveyors shows that while rents are up for the second consecutive quarter, difficulty in securing buy-to-let loans is continuing to contri-bute to a lack of supply.
Some 27% more surveyors re-ported a rise in rents rather than a fall. A year ago 29% more surveyors reported falling, and not rising, rents.
But trouble with obtaining buy-to-let mortgages is leading to the lack of supply, which has now fallen for four consecutive quarters, although at a slightly slower pace.
In the run-up to July the net balance of surveyors reporting a fall in landlord instructions was -6, in comparison with a net balance of -12 in the previous quarter.
But just 4.1% of landlords say they intended to sell their properties at the end of a tenancy agreement.
One-third more surveyors expect rents to rise over the next quarter rather than fall, with rents for houses expected to mar-ginally outperform flats.
RICS spokesman James Scott-Lee says: “Supply of lettings property continued to fall in the three months to July although at the slowest pace in a year which has helped propel rents higher for the second conse-cutive quarter. Landlords may still be struggling to access finance des-pite improved conditions.
John Heron, managing director of Paragon Mortgages, says the RICS figures echo what he has been saying for some time – that the private rented sector has to expand to meet tenant demand.
He says: “With fewer owner-occupier mortgages available, limi-ted resources in social housing and wider social and demographic changes such as a growing popu-lation and rising numbers of single person households, we are entering the age of renting.
“Unless the private rental sector is able to meet this demand, rent inflation is likely.”