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An increase of 10% predicted in London rents!

10.09.2019

An increase of 10% predicted in London rents!

The Global research company Capital Economics released a report mid last month in which they predicted a cumulative 10% increase in rents over the next three years. Among other things, they cite decreasing and constraint supply due to an exodus of private landlords, low unemployment and increasing demand, due to new households as young adults are moving into the private rented sector, as key factors. They also feel that supply will remain constrained and employment will remain high, with an expected pick up in economic activity in 2021 leading to significant increases in rents.

They state at the outset of the report

London’s rental market is shifting to a new phase of adjustment. Low returns and tax changes are driving landlords from the market while rising wages and low unemployment are supporting tenant demand. As a result, fresh imbalances between rental supply and demand are building, which will increasingly push up rental prices. Assuming the disruption of a no-deal Brexit is avoided, we expect to see a surge in London rents across our forecast, with a cumulative 10% rise in the three years to 2021.”

This will be welcome news for landlords and for those investors who are looking beyond the current Brexit malaise towards the future growth areas of London property. In addition, those who are looking to invest from overseas may also look to include a recovery in sterling values alongside a landscape of increasing rents and returned economic growth.

The full report is available at:

https://www.capitaleconomics.com/publications/uk-housing/uk-housing-market-update/a-surge-in-london-rents-is-coming/

Source: https://www.capitaleconomics.com

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