News
Rents to rise faster than house prices in next five years
Friday 17th February 2017
According to the latest research from the Royal Institution of Chartered Surveyors (RICS) they anticipate an increase of just less than 20% for house prices, yet rents are expected to rise at 25% for the same period.
This increase is owed mainly to an anticipated reduction in housing supply in the private rented sector caused by many landlords having to exit or reduce their portfolios caused by the changes in tax.
The introduction of the 3% stamp duty surcharge on buy-to-let homes and the phasing out of mortgage tax relief will inevitably push some landlords out of the market. This in turn will reduce the number of properties available to tenants, thus pushing up the asking rents.
Given the inadequate supply of housing in the UK, combined with pressures facing the buy-to-let sector, it is not surprising that rents are expected to rise by 25% over the next five years, according to Charles Haresnape, group managing director of mortgages at Aldermore.
He said "This [RICS latest report] further supports our view that additional assistance is required for small developers which could go some way to alleviate the slow progress in addressing this [housing] deficit. In light of the housing white paper released this week, the latest RICS survey highlights the scale of the challenge the government faces."