UK rents are expected to rise by an average of 11.4% over
the next five years, according to a prediction by CBRE.
Alongside fairly moderate growth of 1.8% in the average UK
house price this year, the property group expects rents to rise by 1.3% during 2019.
The report, which looks at how economic, political,
financial and technological trends could affect the property market, foresees
further growth in rents leading up to 2024, supported by a drop in housing
supply in the private rental sector, amid “dampened investor demand for
buy-to-let”, and growing demand for rental homes, particularly from
lower-earning young people.
CBRE estimates that UK rents will rise by 1.3% in 2019,
followed by growth of 1.9% in 2020, 2.5% in 2021, 2.7% in 2022, and a further
2.6% in 2023. This equates to total growth of 11.4% during the whole period.
House prices, on the other hand, are expected to increase by
1.8% this year, followed by growth of 2.3%, 3.4%, 3.7%, and 1.3%, equating to
Miles Gibson, the Head of UK Research at CBRE, says: “We expect rather
weak house price and rental growth over the next year, but we think that the
lack of supply and low interest rates for mortgages will hold prices up.”
that weak supply and strong demand is “creating a lot of interest among
investors” in the student accommodation and build to rent sectors, especially
in terms of institutional capital.
billion of institutional funds have been invested in the year to the third
quarter (Q3) of 2018, which is 51% higher than in the same period of 2017.
is on a firm upwards trajectory, with volumes in 2019 likely to exceed 2018’s
total, according to CBRE.
believe that UK rents will rise by 11.4% by the year 2024?