The UK’s private rented sector continues to face mounting pressures as tenant demand outpaces supply, according to the latest housing market snapshot from the Royal Institution of Chartered Surveyors (RICS).
The survey paints a challenging picture for both renters and landlords, with demand for rental homes continuing to rise while the number of properties entering the market remains constrained. In May, a net balance of 14% of respondents reported an increase in tenant demand, highlighting the ongoing imbalance between supply and need across the sector.
At the same time, landlord instructions remained firmly in negative territory, with a net balance of -28% of contributors reporting a decline in new rental listings. The shortage of available homes is continuing to place upward pressure on rents, with expectations for rental growth strengthening to +36% – the highest level recorded since May last year.
While the lettings market remains under strain, the wider housing market also continues to experience challenging conditions. Agreed sales remained subdued, with a net balance of -37% of survey respondents reporting a decline in transactions. Although still negative, the unchanged figure suggests that the pace of deterioration may be beginning to stabilise.
One of the most notable findings was the increasing time taken for property transactions to complete. The average period from a property being listed to reaching completion rose to 21.5 weeks – the longest duration recorded since RICS began collecting the data in 2017.
House prices also continued to soften, with the headline net balance remaining at -35% for the second consecutive month. Regional variations persist, with respondents in the South East and East Anglia reporting stronger downward pressure on prices, while Northern Ireland continued to record robust growth.
Looking ahead, short-term confidence remains cautious. A net balance of -45% of respondents expect prices to fall over the next three months. However, sentiment improves when considering the longer-term outlook, with expectations for the year ahead edging into positive territory at +6%.
Commenting on the findings, Tarrant Parsons, Head of Market Research and Analysis at RICS, said recent data suggests the housing market downturn may be stabilising, although it remains too early to describe the current environment as a recovery. He added that ongoing inflationary pressures and uncertainty around future interest rate decisions are likely to continue influencing market sentiment in the months ahead.
For the lettings sector in particular, the continued mismatch between supply and demand remains a significant concern, reinforcing calls for greater investment and policy support to increase the availability of quality rental homes across the UK.
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