According to UK property agents Savills, rent prices across the UK are set faster than the prices of housing over the course of the next five years.
Rent is expected to increase by 19% between now and 2021. Meanwhile, house prices are expected to increase by just 13%.
In London, the gap between the two rises is much greater; rent will rise by 24.5%, a 6.5% increase to the rest of the country. Meanwhile, house prices in London are expected to rise by 10.9%.
It’s widely believed this is because of a combination of “post-referendum economic uncertainty” and weaker consumer sentiment.
Pressure on rental prices looks set to be caused by would-be first-time buyers being forced to rent as housing market conditions get tougher, with the recent tax changes likely deterring many buy-to-let landlords in the private rented sector, according to Savills’ predictions.
|HOUSE PRICES AND RENTS COMPARISON|
|Year||House prices||Rent prices|
|Total in 5 years||+13.1%||+19%|
However, every cloud has a silver lining. Next year, Savills have predicted the average house price will remain the same. Fortunately for those living in Scotland and the North East, house prices are expected to fall by 2.5%.
There’s a light at the end of the tunnel for house buyers though…
Prices in the north are expected to “outperform” by the end of 2021. Demand for rental properties is set to increase, causing first time buyers to struggle with affordability.
For those who want more information, the research and report done by Savills can be found on their website or via this direct link here
An alternative is the PDF version of the report which can be downloaded from here