Rents are forecast to see strong growth between 2018 and 2022, according to the latest residential property forecast from Knight Frank.
The company predicts that national rents will rise by 1.2% this year, 2.5% in 2018, 2019 and 2020, then a 3% rise in 2021 and 2022 – a total rise of 14%.
In London, rents are expected to increase by 0.7% this year, by 3% in 2018, by 2.5% in 2019, followed by three years of growth at 3%, a cumulative 15%.
However, rental price growth in outer prime London rental market will see less robust growth.
The forecast in this sector is for rents to fall by 3.5% this year and by 1% next year before returning to growth with an increase of 1% in 2019, a rise of 2% in 2020, growth of 2.5% in 2021 and 3% in 2022, a total rise of 8%.
For those of you also keen to learn about prospects for actual home price growth, Knight Frank forecast that prices will rise by 1.5 this year, 1% in 2018, 2% in 2019, 3% in 2020, 3.5% in 2021, and 4% in 2022 – a cumulative 14.2%.
Knight Frank expects property price growth over the five-year period to be led by the Midlands, the East of England and the North West.
Knight Frank’s outlook review report said: “Once the Brexit deal is completed, we forecast rising momentum across the market, with price growth reflecting this in many locations. The variations currently observed in the prime housing markets in London and beyond are set to continue.
“The UK may now be entering a period of interest rate rises but, even so, we expect rates to be low compared to long term norms by the end of the forecast period. While development levels are rising across the country, the shortage of new homes is unlikely to be fully reversed in the coming years and that will underpin pricing. On the other hand, factors such as deepening affordability pressures and property taxes, will continue to weigh on pricing.”
By Marc Da Silva