Savills 5 year forecast predicts rent rises to outstrip house prices

by Property 118

9:27 AM, 4th November 2016
About 2 years ago

Savills 5 year forecast predicts rent rises to outstrip house prices

Make Text Bigger
Savills 5 year forecast predicts rent rises to outstrip house prices

SavillsSavills forecast that by 2021 UK rental prices will increase by 19% and that house prices will have grown by only 13%.

The disparity in growth is predicted to be even greater in London with rental prices rising by 24.5% over the same period and house prices by only 10.9%.

 

Savills are blaming post-referendum economic uncertainty for dampening demand in home purchases and thus thus increasing demand and price pressures in the rental market. Potential first time buyers are being forced to rent as housing market conditions get tougher on top of Section 24 tax changes for Buy to Let investors, which are likely to reduce rental property purchases and suppress the levels of homes in the Private Rented Sector.

Lucian Cook, Savills UK head of residential research, said “what is clear is that the housing market does not like political and economic uncertainty and this points to a lower growth, lower transaction market across the board. A realisation that Brexit feeds into the wider economy, people’s prospects for earnings, people’s prospects for employment and then that beginning to filter through into the hard economic reality is likely to make buyers more cautious.”

The above statement is reflected in their figures with house prices expected to stall completely with 0% growth next year.

Savills forecast for the next 5 years is below:

Year House prices Rents
2017 0% +2.5%
2018 +2% +4%
2019 +5.5% +5%
2020 +3% +3.5%
2021 +2% +3%
Five year total +13.1% +19%


Comments

Gromit

10:54 AM, 4th November 2016
About 2 years ago

I think Savills have severely underestimated the impact that Sec24 will have on the level of rents. When similar though milder measures were introduced in Ireland rents went up by 50%; so I can see the 5 year total being in the region of 50% not 19%

Whiteskifreak Surrey

11:25 AM, 4th November 2016
About 2 years ago

The amount of hate towards BTL Landlords in the comments for the BBC article ( http://www.bbc.com/news/business-37864258 ) is unbelievable. PRS seems to be seen less favourable than ISIS.
Some of the commentators propose 10% interest on mortgages and 200% tax...
Sickening.

Recardo Knights

15:19 PM, 4th November 2016
About 2 years ago

I also listened to the news rents up to 24% due to Britex and uncertainty. No mention on Section 24, extra tax, and dearer stamp duty. No mention of BTL'ers not increasing portfolios but in fact like me will be reducing availably rental properties.

If there was no vote and things remained the same, as rentals started to creep up next year, it would be blamed on greedy landlords who do not even provide decent places for tenants, I doubt there would be a mention of higher taxes, regulations, stamp duty and licensing to fill council coffers.

H B

10:38 AM, 5th November 2016
About 2 years ago

Reply to the comment left by "Whiteskifreak Surrey" at "04/11/2016 - 11:25":

And just imagine the reaction when we start raising tents across the board because of s24. We'll be seen as even worse than. But of course the media and our tenants will not understand that it is with a really heavy - we do not want to exploit tenants but simply generate an income from them.

The anti-landlord sentiment and tax changes are pushing me in the direction of selling up. I decided to hold firm last year thinking that a Tory government would not be stupid enough to go through with this, but they have and I am worried that my boat is holed below the waterline.

Kate Mellor

14:58 PM, 5th November 2016
About 2 years ago

Reply to the comment left by "Whiteskifreak Surrey" at "04/11/2016 - 11:25":

I won't even bother to read this stuff. It just makes me too angry. I only realised I was a greedy, scum-sucking low-life in the past 12 months and I can assure you it was a huge shock!

The disenfranchised, the jealous & the short-sighted all need someone to direct their anger at and unfortunately we're it and the government is right on board with it. 'Cause lets face it, they're the true culprits, so their best bet is to provide an alternative blame-hound.

The same thing is happening with the EU immigrants. They're hated by the masses for doing what's best for themselves and their families because an inexperienced and short-sighted government made it possible for them. Instead of directing that anger at those who did that we have racial hatred & Brexit.

People can't seem to grasp the concept that without landlords & PRS where would they live?? Would they magically be able to afford a house? Would Councils magically produce extra social housing stock? Would the super-rich or high income professionals; Russian Oligarchs & Chinese/Japanese mega-rich & property investment corporations all pull out of London property leaving cheap and affordable housing for them to move into?? Not a chance, but these people just need somewhere to direct their hatred.


Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

And the landlord vote goes to - ?

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More