Forecast of the rental market in the UK for 5 years

A large company specializing in the residential property market in England Savills has published its report, which made a five-year forecast of the market development of residential property in the UK.

It is expected that in spite of all the efforts of the government to support tenants program “Help to buy” (buy to rent), the demand for rental residential properties will grow by about 1 million units over the next five years. The pressure on the rental market of residential property in the UK will undoubtedly lead to higher prices.

By 2011, the rental sector increased by 2 million units over the previous ten years, and demand growth continues. Since entering the new proposals are sorely lacking, especially in large cities, it is possible to predict that in 5 years there will be an increase in rent of approximately 21%.

In London the gap between supply and demand in the rental market of residential real estate is particularly acute, therefore, it is projected that in London we can expect rent growth to 25.8% in the next 5 years.

Since the main beneficiaries from the increases in rent are homeowners who rent out their homes, London will remain very attractive to investors. In fact, the main problem of the market, both now and in the future will be a shortage of new housing, the government needs to attend to the problem of providing new residential units to the market.

In the sector of real estate, with an average rate of rent over £1800 per week, potential for further rental growth is slightly smaller, since the approach is quite a lot of properties that needs to be put into operation. However, it is still expected to increase rents in the luxury rental sector by 20.4% over five years.

In General, UK growth forecast for rent next: 2% next year and 2.5% in 2015, 4% in 2016 , 5.5% in 2017 and 5.5% in 2018.

The forecast of growth of cost of rent in the exclusive areas of London next: 2.5% in 2014 and 3% in 2015, 4.5% in 2016, 2017 and 2018.

® Maxim Savitsky, 07.11.2013.