Residential rental prices in the UK are stabilising as the number of accidental landlords declines due to an improvement in the property market, it is claimed.
The latest figures from the Royal Institution of Chartered Surveyors show that 6% more estate agents reported a rise in new instructions from landlords in the three months to the end of July, compared with 21% in the previous three month period.
The number of rental properties coming on to the market is falling quickly, leading to less choice and potentially higher rents for those priced off the housing ladder, it says in its report.
The main reason for the fall in new landlords is the disappearance over summer of so-called accidental landlords who decided to rent rather than sell their properties in a falling market.
Their numbers increased at the end of last year as property prices reached lows but now evidence of price stability in the housing market has encouraged owners to sell instead.
‘This may be the first indication that the stabilisation in the residential sales market is having an impact on the number of accidental landlords entering the lettings sector,’ said a RICS spokesman.
It now expects rental prices, which had been falling, to start to stabilise.
The balance of surveyors reporting a fall rather than a rise in rents was 29% in the quarter, compared with 55%.
In an optimistic sign for buy-to-let landlords, an increasing number of agents expect rents to rise in the coming months.
The balance expecting a fall rather than a rise improved from 25% to 6%, RICS said.
‘The number of properties coming on to the rental market has slowed as the sales market has begun to stabilise.
This is good news for landlords, who were coming under pressure to reduce rents as a result of oversupply.
The need to respond in this way is easing and, providing the housing market holds firm, the outlook for the rental market should continue to improve,’ the spokesman added.
However, the change in sentiment could put those searching for affordable accommodation at a disadvantage.
Figures from RICS, due next week, are expected to show that housing market activity continued to improve in August.[Property Wire News]