The UK housing market continues to face a shortage of supply in the sales and lettings segments, which pushed rents higher in January. A survey conducted by the Royal Institution of Chartered Surveyors (Rics) published on Thursday (9 February) revealed that demand for rental properties continued to increase at the national level in the three months to January.
Rics noted that the imbalance between supply and demand of rental properties would lead to an increase in rents. The UK Residential Market Survey pointed out that London and Scotland were exceptions to the pattern witnessed in this segment. While rent expectations remained flat in Scotland, it was downbeat in the capital.
Going forward, Rics projected rents would witness a cumulative increase of over 25% in the next five years at the national level. This will be more than the 20% house price inflation anticipated by respondents over the same period.
In the sales segment, 25% of the respondents said they anticipated a rise in house prices in January. However, Central London was an exception as it witnessed an eleventh consecutive monthly decline in prices in January.
Further, Rics said it expected house prices to rise across the UK over the next 12 months, but said that London would continue to be an exception and would see a decline in prices.
The findings come as sales of houses remained flat for the second consecutive month in January throughout the country.
Commenting on the report, Rics chief economist Simon Rubinsohn said, "The scale of the challenge Government faces as it announces its new approach to housing is clearly demonstrated in the results from our latest survey. Not only are the headline price and rent series pointing to further increases over the course of this year, but more significantly, the medium term view of RICS professionals working up and down the country is that both house prices and rents will over the medium term continue to grow at a faster pace than wages putting even greater pressure on affordability. Whether the measures announced can ease this this trend remains to be seen."