The housing market is lacking momentum and needs a "turbo boost", the Royal Institution of Chartered Surveyors has said, with buy-to-let landlords currently expected to sell homes more often than they buy properties.
Its monthly survey of the residential market found that there is a huge shortage of supply of homes for sale and rent, and respondents said that this could worsen in the next three months.
As a result, those surveyed said that rental inflation would eclipse that of house price increase over the next five years. Rics said that during the period rents would increase by 25pc, while house prices would increase by 20pc.
The 3pc hike to stamp duty for additional homes, and a forthcoming slash of tax relief on buy-to-let mortgage interest payments will likely lead to investors cutting down on the number of properties they own, according to those polled. It found that 26pc more contributors expected landlords to scale back their portfolios than expand them.
Jeremy Blackburn, Rics' head of policy, said that the Government's move away in the housing white paper from home ownership to rent must be "credited". He added: "They’ve listened to us on expanding supply not just pumping demand, and on giving institutionalised private rental sector much greater priority alongside owner occupation.
"Our survey demonstrates how vital greater supply is in this sector; we really need to turbo boost 'build to rent'. The consultation on how to do this must be used as a defining moment.
“At the same time we need to stop punitive measures against our bedrock small landlords. The detail on the ban on letting agent fees is yet to come, and along with any overt forcing of longer tenancies, could dampen investment in buy-to-let overall. The government must be careful about signalling both stop and go at the same time.”
Demand for new homes for sale remains low, and the number of people reporting an increase in demand is at the lowest rate since August, when the market was hit by uncertainty after the vote to leave the European Union. The number of homes for sale remains at a record low, and 11pc more surveyors reported a fall rather than a rise in the level of new instructions last month.
In the next three months, house prices are expected to rise across the country, except in central London, where they are forecast to fall.