19% Increase In Rents Predicted In UK

uk rents

There are reports that the pace of rent increases has slowed in recent months, unfortunately for anyone renting property, this may turn out to be the calm before the storm with the Financial Times reporting that rents could rise by 19% across the country by 2021 and by as much as 25% in London in the same period.

The increases are expected to come as a result of many buy to let investors pulling out of expanding their portfolios as government policy has imposed stamp duty increases. Further cuts to tax relief on the interest paid on mortgages has also done little to support investors either and this has led to predictions this will restrict the supply of new rental properties coming onto the market as a result.

Government moves to raise the cost of investing in buy to let property may turn out to be a mistake just at a time when most analysts are predicting that the pace of property price growth is set to slow in the coming years as the Brexit effect begins to sink in.

If analysts are correct, then any slowdown in property price growth will be triggered by falling demand for property, which in turn suggests that affordability will reach a ceiling and there will be less people looking to buy.

A property market that stalls is generally good news for Landlords and buy to let investors who will see tenant demand increase. Couple this with fewer properties being brought to market and the only way for rents to go is up.

Savills are more bullish about the prospects of property price growth in the UK in 2019 when everyone is likely to have a better idea of what Brexit will mean for the UK economy. Their prediction of 13% growth in prices overall in the next five years may turn out to be on the conservative side if the present government are able to get what they want in negotiations with the EU.

The conclusion to all of this is, the next 12 months are likely to be a good time to invest in property and benefit from rising yields in UK cities outside of London.

 

uk rents

Source: Homelet

 

 

Leave a Reply

Your email address will not be published. Required fields are marked *