Rental housing crisis and decline in house sales shake UK property market

Rents in the UK Expected to Rise Sharply

According to a survey by the Royal Institution of Chartered Surveyors (RICS), rents in the UK are expected to continue rising sharply. A net balance of 63% of property professionals anticipate rental prices to increase over the next three months, the highest level since records began in 1999. This comes as tenants already face significant financial pressure, with one in three private renters spending at least half of their income on rent, according to a survey by Shelter. The lack of affordable rental properties exacerbates the situation, as demand from tenants continues to rise while the number of available properties declines. The imbalance between supply and demand has led to bidding wars among tenants and rising rents.

Rental Housing Crisis and Decline in House Sales

The rental housing crisis in the UK is part of a wider trend in the property market, with house sales also experiencing a decline. The RICS survey found that buyer inquiries fell and agreed sales declined in July, representing the weakest reading since the early stages of the pandemic. Experts attribute this slowdown to economic uncertainty, rising interest rates, and a tougher credit environment. The overall outlook for the property market remains concerning, with high mortgage rates deterring buyers and a shortage of rental properties driving up rents.

Solution to Alleviate Pressure on Renters and Buyers

To alleviate the pressure on renters and prospective buyers, experts suggest increasing the supply of affordable homes, including social housing. The rental market is described as "broken" by industry experts due to the imbalance between supply and demand. Landlord instructions have fallen, leading to bidding wars among tenants and rising rents. Despite the cost-of-living crisis, the survey indicates that rents are likely to continue increasing. Increasing the supply of affordable homes is seen as a solution to address the rental housing crisis and support the property market.