The RICS UK Residential Market Survey for January 2017 has predicted that, over the following 5 years, the amount of rent paid by tenants to their landlords is going to increase, on average, by a higher percentage than the price of homes. If this happens then it will be good news for landlords choosing to remain in the residential property lettings business but not so good for homeowners and certainly not good news for tenants.
Over the next 5 years it is being predicted that rents will go up by in excess of 25% whilst house prices are forecast to go up by just short of 20% over the same period on a three-month average. This rise in rental charges is partly due to the expected fall in the number of properties being available to rent as the number of landlords is probably going to reduce the number of properties that they rent out and some may well decide to get out of the buy-to-let market completely following the forthcoming cut in tax relief on mortgage interest and the change in stamp duty.
It will be interesting to see in which parts of the UK that rents increase the most by in percentage terms over the next 5 years and whether the forecast percentage rise in rent being charged by landlords encourages more people to apply for mortgages to buy their own homes to live in.
In our last post we made reference to there having been a drop in the last quarter of 2016 of tenants showing an interest in renting a home in Central London but there had been an increase in tenants showing an interest in renting a property to live in in the South East of England.
We will keep you updated about how rental income levels change in comparison to increases in house prices so, if you are a landlord, you may wish to return to our website in the future.