Back Arrow Back to Articles

Rents Could Rise By 15% as Rental Supply Dries Up

mailbox

In research by the Royal Institution of Chartered Surveyors (RICS), they found that rents could rise by 15% as quickly as 2023 due to the shortage in rental properties.

Their survey detailed how small-scale landlords are leaving the market due to changes made to buy-to-let investment regulation.

RICS went on to detail how its members have seen rental property supply fall consistently for nearly two years, although demand for rental properties is still increasing. This is particularly noticeable in Birmingham, where rental supply is struggling to meet the demand that has exploded over the last few years.

Changes to the buy-to-let market that were started last year have meant that mortgage tax relief for landlords will be heavily restricted by 2020, severely dampening many small-scale landlord’s ambitions. Abdul Choudhury, RICS Policy Manager, described how the full impact is yet to be felt:

“Withdrawing tax breaks that small landlords relied on, placing an extra 3% on second home stamp duty, and failing to stimulate the corporate build-to-rent market, has understandably had an impact on supply.

“Ultimately, the government must consider the impact of its policies, and if the wish is to move away from the private rented sector, it must provide a suitable alternative.”

According to the survey, the South West of England will see some of the highest growth in rents, particularly in regions such as Exeter.  Similarly, areas such as Edinburgh, Birmingham and the Commuter Belt are experiencing ‘mini-booms’.

This lack of stock is driving core growth in these areas, combining with increased regeneration to create a more desirable destination. For investors and any UK property investment company, the market is currently in a healthy position in terms of rising rental yields and capital growth, despite the lack of stock.

Stay Ahead of the Property Market: Newsletter

Sign up today and be the first to get the latest property news, market insights and SevenCapital development updates delivered straight to your inbox, every month.

Explore Developments

New Eton House
Slough
1 & 2 Bedroom Apartments

Prices From

£239,950

Right Arrow

Help to Buy

CopperBox
Birmingham
1 Bedroom Apartments, Studio

Prices From

£174,950

Right Arrow

ONLY 1 & 2 Beds REMAINING

Steel House
Slough
1 & 2 Bedroom Apartments

Prices From

£314,950

Right Arrow

A FIRST FOR BIRMINGHAM

St Martin’s Place
Birmingham City Centre
1 & 2 Bedroom Apartments, Luxury Penthouses

Prices From

£284,950

Right Arrow