11:11 AM, 3rd January 2023, About 9 months ago 5
Not only will demand for rental property in the UK remain high in 2023 – but rents will rocket by 12.9%, one finance firm predicts.
That’s the view of Finanze who say that demand for accommodation from employees, young cohabiting couples with children and students will continue through the year.
And, as a result, Finanze is predicting that rents will rise across the UK by 12.9%.
Joshua Ellard, the firm’s head of specialist finance and research, said: “This time last year, many would have been expecting a period of recovery in which the economy could thrive and recover from the global pandemic.
“In reality 2022 has thrown everything at us, from both economic and political perspectives.”
In its annual research report, the firm says that the Bank of England’s base rate will rise to 5% – until inflation is firmly under control.
Finanze is also taking a bleak view on house prices and state they will fall by 10.98% in the UK this year. In London, the report says that the capital’s house prices will drop by 15.4%.
Its research points to the cost-of-living crisis, increasing mortgage rates and growing uncertainty among prospective buyers for halting their buying plans for pushing prices down.
The firm is also predicting that inflation for the last quarter of 2023 will be around 4.5%, before settling at a ‘new normal’ of 3% in late 2024.
The UK’s GDP is also expected to remain relatively flat and will decrease by around 0.5% over the year before there is a return to a period of economic growth in 2024.
Mr Ellard says: “The increasing barriers to getting on the property ladder will force many to continue to rent.
“Fundamental economics tells us that when the demand for rentals outweighs supply, rental costs will only increase.”
The annual report highlights that while rents in the UK will rise by 12.9% – or 10.14% when London is excluded – there is bad news for renters in the capital.
That’s because the figures from Finanze show that rents in London will rise by 15.8% in 2023.
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