HOME renters could see prices surge by 15 per cent in the next five years, predicts the Royal Institution of Chartered Surveyors.

RICS says the supply of new property onto the market continues to “dry up” while demand increases. The number of rental properties has fallen for the eighth consecutive quarter, according to a RICS survey of chartered surveyors.

Rents are expected to go up by just under two per cent in the coming year, but the longer term outlook will see 15 per cent added to rents by 2023, warned RICS.

The body said the alarming figures reflected a shift in the buy-to-let market following tax changes, resulting in smaller scale landlords leaving the sector.

RICS chief economist Simon Rubinsohn said: “The risk, as we have highlighted previously, is that a reduced pipeline of supply will gradually feed through into higher rents in the absence of either a significant uplift in the Build to Rent programme or government-funded social housing.

“At the present time, there is little evidence that either is likely to make up the shortfall.

“This augers ill for those many households for whom owner-occupation is either out of reach financially or just not a suitable tenure.”

Abdul Choudry, policy manager at RICS, commented: “Our survey suggests that recent government policy and legislation changes have impeded the growth of the private rented sector, which is a vital part of a functioning homes market.

“Withdrawing tax breaks that small landlords relied on, placing an extra three per cent on second-home stamp duty, and failing to stimulate the corporate Build to Rent market, has understandably impacted supply.”

He said the Government must look at ways “to encourage good landlords”.

Meanwhile, looking at house sales, prices in the North West held strong in July, said RICS, and show no sign of falling any time soon.

However, the average number of homes on agents’ books remained at a near low, of 47, and demand from new would-be buyers fell.