UK property rents set to rise more than prices in next five years | Europe | News
Rising demand from those unable to buy their own homes and those reluctant to commit in the current market means that rents will rise significantly more than house prices in the UK over the next five years, according to international real estate adviser, Savills.
The company forecasts that private renting will account for one in five households by 2016 and it is unlikely that supply will keep pace with demand at least in the next five years. Competition among renters will drive rents higher, with growth in mainstream rents forecast to rise by 20.5% by the end of 2016. This growth significantly outpaces house price growth which is expected to total just 6% over the same five years.
This differential in capital value growth and rental value growth will push out yields and, according to Yolande Barnes, director of Savills residential research, is likely to be the catalyst for renewed investment activity in the sector by corporates and institutions looking for income rather than individuals looking for capital growth.
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