Savills 5 year forecast predicts rent rises to outstrip house pricesMake Text Bigger
Savills 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:
|Five year total||+13.1%||+19%|
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