Over the next five years, rents will rise steeply due to the Government’s decision to fight buy-to-let landlords at all costs, estate agencies are forecasting.
Londoners will face a 25% increase in rents over the next five years, Savills has said. Across the rest of the country, renters won’t do an awful lot better as they may face a predicted increase of 19%.
Rental growth will – by far – oustrip house price growth due to Brexit uncertainty, the estate agent warned.
“The rental growth is largely driven by the mismatch between supply and demand,” said Lucian Cook, director of residential research.
JLL, yet another group of estate agents, predicted an increase of 17.6% across the country over the next five years, with London’s rents rising by 19.9% over the same period of time.
Savills explained that, according to their research, the number of mortgaged buy-to-let landlords purchasing new homes is set to drop by a third (to 80,000) before recovering slightly to 90,000 by 2021.
Annually, house prices increased by 8% in August across all of the UK, and by 12.1% in London, data from the Office for National Statistics showed. For 2017, however, Savills predicts a flattening of prices in both the capital and Britain overall.
“We think sentiment will be affected as there is more of a realisation of what Brexit means for earnings, for the economy and for employment,” Mr Cook said.
Whilst different agencies predict different levels of growth and weigh the influence Brexit will have on the property market in the coming years, the overall sentiment remains the same; a slowdown of growth and then a slow but sturdy recovery.