Rents are expected to rise as tenant demand continues to grow while landlord instructions remain in negative territory, according to the latest survey from the Royal Institution of Chartered Surveyors (RICS).
In August, the net balance for tenant demand stood at +18%, contrasting with landlord instructions at -14%. Looking ahead, 44% of respondents are forecasting rent increases over the next three months, an increase from 33% in July.
RICS members also anticipate that UK rents will increase by approximately 3% on average over the next 12 months.
Meanwhile, homebuyer demand and agreed sales showed some improvement from August's lows, though both measures remained negative. New buyer enquiries rose to -19%, marking its least negative reading since January, and agreed sales reached -17%.
Despite these improvements, Tarrant Parsons, RICS head of market research, noted that any potential market recovery remains fragile. He highlighted the Bank of England's hawkish tone and speculation over potential changes to property taxation in the October Budget as significant near-term tests.
House prices continued to face pressure, with the headline balance at -28% in August. Respondents still expect price reductions over the next three months, and the 12-month outlook for prices was broadly unchanged. London remained more negative on prices than the national average, while Northern Ireland and the North West of England reported rising values and gentle growth, respectively.