Oxford Landlord Rents to Rise

The Royal Institution of Chartered Surveyors (RICS) reports a fall in the stock of rental properties in the UK, and says this has now been a trend over the last three years. 

29 per cent of contributors report a fall in landlord instructions in November.  Over the same period, tenant demand remained steady at the national level. RICS expects rents to rise over the coming quarter. 

Letting agents consulted by the RICS have indicated a forecast of rent rises equivalent to two per cent over the coming 12 months. 

Over the longer five-year horizon, rental growth projections stand at more than three per cent per annum - this is outstripping sale prices which are seen rising by around 2.5 per cent annually.

This trend of sustained high demand from tenants and reducing supply resulting from landlords reacting to hostile government policy in the areas of tax relief, stamp duty and the ban on fee charged to tenants.  If, this anti-landlord focus continues, this author predicts a perfect-storm for people who rely on the private rented sector.

These pressures are particularly acute in Oxford, where high house prices mean that 28% of the population depends on good quality rented homes.  The tragedy is that as rents rise above inflation and above house prices, the investment returns should be attracting new landlords to invest, but to date this has not reversed the landlord exodus.

Our next government needs to think very hard before they intervene further in this fragile market, as they risk creating a rental housing crisis to sit alongside the housebuilding crisis, which is already an acute pressure in Oxford’s housing market.