Rising interest rates are pushing some landlords to consider selling up, which in turn could squeeze availability and raise costs for tenants, the Royal Institution for Chartered Surveyors (RICS) has said.
Nearly two-thirds of estate agents reported an increase in landlords looking to sell in April, according to the RICS’ survey A similar proportion reported a decline in landlords looking to buy.
RICS said that landlords are also considering their future due to proposals in the Renters’ Reform Bill for a ban on no-fault evictions in England.
RICS Senior Economist, Tarrant Parsons, said “The latest RICS UK Residential Survey feedback indicates a modest recovery in the sales market activity during May, with generally less negativity compared to the end of 2022.”
“However, it seems storm clouds are gathered, with the UK’s stubbornly high inflation likely undermining the recent improvement in activity by prompting the Bank of England to take further action through interest rate rises, leading to higher mortgage rates and ultimately reducing affordability and buyer demand. The banking sector appears to expect this with many banks and building societies already introducing products with higher interest rates.”
“Interest rate rises are also impacting the rental sector and combined with looming reforms proposed in the government’s Renters (Reform) Bill, landlords are increasingly deciding to leave the sector and sell up property, causing further constraints to lettings supply.”