The cost of rent across the UK rises as private landlords pull out of the housing market says RICS.
A survey carried out by The Royal Institute of Chartered Surveyors (RICS) found that due to changes in policy, 61% of landlords are likely to step out of the housing market within the next year.
RICS reported that landlords now face a 3% stamp duty charge when investing on second and subsequent properties. They also face a gradual loss of tax relief on mortgage interest payments.
With fees rising for landlords, private renters will see their monthly costs going up over the next five years too, says the RICS.
Paul Bagust, UK commercial property director at RICS, described the survey results as “concerning”.
Mr Bagust said: “A functioning private rented sector is crucial to a healthy housing market and it’s predicted that over 20% of all households will be PRS by 2020.”
HomeLet also carried out research into private rental prices and found that rent across the UK has risen by 2.4%. This is the highest rate of annual growth seen in the private rental sector this year.
The average rent agreed on a new tenancy signed last month was £939 according to the August HomeLet Rental Index, compared to £916 in the same month of 2016.
In London the average rent cost rose to £1,609.
The south west of England saw the biggest price hike with a rise of 3.9% since August last year.
Martin Totty, chief executive officer at HomeLet, said: "Landlords will only be encouraged to invest in property over other assets if they’re convinced they can achieve reasonable returns. If not, then the supply of rental properties could become constrained."
As rent increasingly becomes more expensive, many families are struggling to keep a roof above their heads.
In July, the Guardian reported 100 tenants a day lose their homes because they can no longer afford the rent.
According the Guardian’s report, the number of private tenants forced out of their homes has exceeded the number evicted by social landlords for the first time in 2014.