Rents Set To Rise Over Next Five Years
Some broadly good news to end the week – rents are predicted to grow 13.7 per cent in the next five years according to a forecast by Savills.
Alongside a fairly bleak prediction for the sales market between 2019 and the end of 2023, Savills says the rental market will continue to see strong demand, not least because of ongoing difficulties for buyers to obtain mortgages.
This is particularly true in London, where rents will rise by 15.9 per cent according to Savills.
“Until the market sees a significant injection of Build To Rent stock, rental demand will outstrip supply and rents will rise” explains Lucian Cook, head of residential research for the agency.
“Investor buyers requiring borrowing are expected to focus on higher yielding markets and this will put further upwards pressure on rents in some of the most expensive rental locations” he adds.
However, Savills does not mince its words on the health of the buy to let sector in terms of supply, saying mortgaged buy to let purchases will plummet 23 per cent by the end of 2023.
“This will add to upwards pressure on rents, particularly in London, as investors look to lower value, higher yielding markets” notes the agency.