Rents in the UK are expected to grow in excess of 20% over the next five years, according to the February 2017: UK Residential Market Survey published on Thursday (9 March) by the Royal Institution of Chartered Surveyors (Rics).
The survey warned that the rise would have a negative impact on tenants especially those in the lower income group. Homeless people and those on housing benefits would be pushed out of the private rental market as prices rise.
It also revealed that there is a growing shortage in the number of properties available for rent with tenant demand growing for the third consecutive month. Around 15% of the respondents surveyed by Rics noted an increase in demand for houses on rent in February.
The increase in rent expectations comes as the number of new houses put up for rent have declined.
Meanwhile, speaking about the rise in rents, Rics CEO Sean Tompkins called on the government to act and said, "Worryingly our figures show that as a result of a combination of economic pressures, more and more vulnerable tenants are being pushed out of the private rented sector. However, if Government were to put in place additional support measures through the introduction of help to rent schemes, the door to the rental market may once again be opened for Britain's most vulnerable."
On the sales front, both transactions and buyer enquiries remained flat in February. The latter had moved into positive territory last September, but seemed to have gradually lost steam. However, house sales grew by 2%.
With regards to house prices, 24% of the respondents said they had witnessed a price rise in February, which was unchanged from January. Region-wise, the strongest growth in prices was seen in the North West of England while notable improvements were seen in Northern Ireland. In contrast, London saw prices fall for the fourth consecutive month.
However, sales grew in London following a year of negative to flat growth. Going forward, respondents across all of UK expressed confidence with regards to transactions growing over the next 12-months.