The Institute's research showed that whilst rental growth is continuing on its upwards curve, there has been a move away from flats and towards houses.
New landlord instructions dropped below the long run average of 16 percent, with the uncertain backdrop of the sector looking to be the probably reason for new investors taking a step back from the market.
Interest rate hikes are also proving problematic for the buy-to-let market with the percentage of landlords selling their properties when tenant leases expire rising to its highest level since January 2005 - now 6.5 per cent
Looking forward, the pace of rental growth is projected to slacken while still being strongly positive. Moreover, surveyors are generally more upbeat about the prospects for houses as opposed to flats, where in broad brush terms, there is perceived to be at the very least an adequate level of supply.
RICS spokesperson Jeremy Leaf said: “A combination of the tightening lending criteria and successive interest rate rises has started to hit the buy-to-let market but with the drop in capital gains tax due in April next year, many landlords will resist selling until the spring.
“With rents still on the increase many would-be-buyers will find accessing the housing market even more difficult as they struggle to raise the capital for that first important purchase. However, many landlords will still take solace from uncertainty in the economy and enjoy the gains from rising rents.”
