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Demand for UK renters fell for the first time last month since the early pandemic, with estate agents forecasting the slowest pace of rent rises in nearly four years, a sign that pressures on stressed households may be peaking.
Demand for rental properties fell to -2 in November, down from 17 in October and the first negative reading since May 2020, according to a survey of estate agents conducted by the Royal Institution of Chartered Surveyors.
The index, published by the professional body on Thursday, tracks the difference between surveyors reporting an expansion and decline in tenant demand to produce a net balance.
RexA separate measure of rental price expectations in the next three months, the balance of agents forecasting rises and falls, was 29 in November, down from 32 the previous month and the lowest since January 2021.
Landlord instructions, which indicate properties for rent, continued to decline at minus 13, but the reading was lower than the minus 30 recorded in October.
“Demand and rent levels have fallen in response to affordability concerns, particularly for those properties where increases have previously been the furthest and fastest,” said Jeremy Liff, director of London estate agency Jeremy Liff & Co.
Rising rental prices have hit household finances hard over the past two years, as strong demand from families who cannot afford a property collides with limited housing stock.
Official data last month showed that average private rents It rose by 8.7 percent in 12 months Through October, up from 8.4 percent in the year through September, just below the record 9.2 percent set in March.
The slowdown in demand for renters reported by Rex came as real estate agents said house prices continued to rise, even if sales remained broadly stable.
The net balance of the index that tracks house prices reached 25 points, up from 16 points in October, representing the fourth consecutive increase and consolidating the upward trajectory of house price growth since the summer.
Some agents attributed the steady influx of new buyer inquiries, which had a positive index of 12, to the upcoming increase in stamp duty.
Chancellor Rachel Reeves' decision to end the temporary holiday on property tax in the Budget means that first-time buyers, for example, will start paying stamp duty on properties worth £300,000 or more instead of £425,000 from April 2025.
Stanley Shaw, of estate agency Mervyn Smith, said: “There is a slight rise in the number of buyers, especially young first-timers, looking to buy before stamp duty next April, but it is not a stampede.”
