There has been a 4% increase in the cost of renting a home over the past 12 months, according to the latest RICS residential lettings survey, which covers the period May to July 2012.
The cost of renting a property has grown by 4.3% over the last 12 months, according to chartered surveyors across the UK. They say this trend looks set to continue as respondents also predict rents to continue to grow by 3.9% over the next year.
In the three months to July, the amount of new properties coming on to the market was little changed compared with the preceding period; a net balance of 2% more surveyors reporting falls in new instructions to market.
At the same time, demand continues to grow, albeit at a much slower pace than in recent quarters, as 4% more respondents reported rises rather than falls in interest from potential tenants (from +14%).
The increase demand has outpaced the change in supply in every quarter since the first half of 2009 although RICS notes that the gap does now appear to be narrowing.
The North West saw rents increase by the biggest margin with values growing by 6.9%, whereas surveyors in Wales reported that rents had in fact stayed at the same level over the last 12 months.
Meanwhile, gross yields have continued to rise during the early part of the year, which has contributed to fewer landlords (3.3%) opting to sell their properties at the end of the tenancy.
“It is interesting to see that the huge growth we have seen in demand in recent years has started to gradually slow,” said Peter Bolton King, RICS global residential director. “While tenant interest is still riding high, what remains to be seen is whether many are willing to meet the increasing rents being demanded by landlords.
“However, it is clear that we have seen rents grow steadily right across the UK for some time. This is partly down to the problem of the scarcity of mortgage finance and the large deposits required by lenders.
“These barriers to home ownership need to be addressed alongside the shortage of new stock coming to the market.”