Rents are predicted to increase by more than 20 per cent over the next five years as the number of new landlord instructions deteriorated, the Royal Institution of Chartered Surveyors found.
The surveyors' monthly residential market survey found the flow of new landlord instructions fell by 10 per cent, the weakest reading in more than two years.
Rics predicted this trend was likely to persist over at least the next couple of months as changes to mortgage interest tax relief start to take effect in April.
The London rental market proved an exception, with respondents to the Rics survey reporting weak tenant demand with negative near-term rental growth.
Beyond the buy-to-let market, the survey found house prices are continuing to increase steadily at a national level.
Respondents in most regions reported an increase in prices with the strongest growth in the north west of England but London and the north east of England were the exceptions.
In fact, surveyors have reported a fall rather than an increase in London prices for a full year, with most of this activity concentrated in the inner boroughs.
The survey said: “Tight supply conditions across a majority of the regions coupled with stable sales activity has led to a further erosion of available stock for sale, with the average stock per surveyor just shy of a record low.
“Indeed, respondents across most parts of the UK continue to highlight in their comments the supply shortage to be very dominant feature of the market at present.”
New buyer requests appeared to have gradually lost steam over the past few months, ending February on a flat reading.
The deterioration in the supply of new listings reported in January was confirmed in February with 14 per cent more respondents reporting a decline in instructions.
The pace at which new instructions were dwindling appeared to be particularly acute in the north west of England and West Midlands.
damian.fantato@ft.com
