The price of renting in the UK is expected to rise at a faster rate than house prices over the next five years, says a new survey by the Royal Institution of Chartered Surveyors (RICS). Rents are predicted to increase by just over 25%, whilst property values will rise by less than 20%.
It will come as no surprise to seasoned tenants that demand for rental properties remains high, with the number of 25-to-34-year-olds who privately rent a property more than doubling between 2003-4 and 2014-15.
However the recent increase in stamp duty, and other tax changes which could discourage buy-to-let landlords, is expected to result in property-owners scaling back their rental portfolios over the next 12 months – RICS reports a lack of new listings for the fourth quarter in a row – leaving renters with limited choice and a competitive market, further driving up rental prices.
Jeremy Blackburn, head of UK policy at RICS, said: “We need to stop punitive measures against our bedrock small landlords. The detail on the ban on letting agent fees is yet to come, and along with any overt forcing of longer tenancies, [it] could dampen investment in buy to let overall.”
This new study is likely to be received with an air of despondency from ‘Generation Rent’, as buying a house becomes a far-fetched dream for more and more people. It comes as the Government admits home ownership is a “distant dream” for young families, and publishes a white paper entitled “Fixing our broken housing market”.
Communities Secretary Sajid Javid told the House of Commons that low rates of house building, relative to the growing population, have pushed up prices. He said house building figures need to rise to 225,000 to 275,000 properties a year compared with 190,000 in 2016.