A new report has indicated that rents in Britain are likely to rise sharply in the next five years, with more people choosing to rent over purchasing property.
The investigation by estate agency Savills forecasts than rents will increase by 19% between now and the year 2021. During the same period, purchase prices are tipped to only rise by 13%.
Capital pressure
Average rents are tipped to rise by 24.5% in London by the end of 2021, with the cost of buying going through the roof.
More pressure on rental prices is being caused by many would-be buyers who simply cannot afford to buy. Recent tax alterations are serving to deter many buy-to-let landlords from making further investments in the sector
With rents set to rise, Savills believe that home price growth is going to be largely flat over the next two years. This, the agency suggests, is due to Brexit negotiations leaving home buyer sentiment ‘fragile.’
Rents are set to rise sharply by 2021
Forecasts
Savills estimates UK house price will stay steady in 2017, then increase by 2% in 2018. Growth of 5.5% is expected in 2019 and 3% in 2020, with a fall to 2% in 2021.
Lucian Cook, UK head of residential research at Savills’ said: ‘Brexit has forced the market to change gear and created uncertainty. The period of negotiation with the EU is likely to be a rollercoaster of confidence.’[1]
‘Buyer sentiment across all sectors of the market is likely to be fragile during the period of negotiations to leave the EU,’ he added.[1]
The table below indicates how Savills projects rents to rise per year until 2021:
| Rents | |
| Year | Rents |
| 2017 | +2.5% |
| 2018 | +4% |
| 2019 | +5% |
| 2020 | +3.5% |
| 2021 | +3% |
| Five year total | +19% |
[1] https://www.landlordtoday.co.uk/breaking-news/2016/11/rents-set-to-rise-significantly
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