Rental Market Forecasts

publication date: Feb 10, 2014
 | 
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

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Rental Market Forecasts

With some rents managing to rise with inflation, while others are pretty static or even falling, knowing whether 2014 is going to be the year to recoup lost rent, is important. That’s especially the case if you are hoping rental income will help support you in retirement.

Rents not keeping up with inflation can mean it’s hard to keep covering rising letting costs, and can mean your income is squeezed to a point where you earn very little from rental income. Whether rents can rise seems to depend very much on what happens to wages. The more money people have in their back pocket, the more money they can put towards rent rises.

So what does the future hold for rents in the UK?

Belvoir                         “There are real indications of a recovery in the housing market with property prices predicted to rise, along with a projected 25 per cent increase in buy-to-let mortgage lending. With this we expect to see the re-emergence of more and more investment-minded landlords looking to capitalise on this trend.

 

“We expect to see modest rent rises in 2014, as the needs of tenants continue to push up demand for quality accommodation. But landlord investors still need to do all the correct ‘checks and balances’ to ensure they realise the best, trouble-free, returns from their properties.”

 

Move with Us                “As asking rents continue to rise, it will not be surprising to see the national average exceed £1,000 during 2014 as a response to the sales market and shortage of supply. (Q4 13 - England, Wales & Scotland)”

 

RICS                            “Notwithstanding the more cautious view on the outlook for rents in the near term, surveyors believe the shortfall in the supply of housing will continue to drive up the cost of shelter looking further out. Over the next five years, rents are projected to post average annual gains of around 4%. The imbalance between demand and supply is even more visible in the sales market, with prices projected to increase by, on average, 5% in each of the next five years. (Dec 13 – England & Wales)”

 

Hamptons                     “In the rental market, the fact there is more mortgage finance available will mean that there will be some degree of switching from renting to ownership, reducing demand. On the other hand, accidental landlords are likely to take the opportunity to sell, reducing supply. Affordability has deteriorated in the rental market over the last few years and, with more options, we expect rental growth to remain subdued in the short term. (Autumn 13 – England & Wales)”

 

Savills                           “Rent rises: We forecast rental growth of 21% over the next five years, which will make it harder for tenants to save for a deposit. (Nov 13 – England, Wales & Scotland)”

 

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