According to a recent report produced by Savills, rents across the UK will rise by a larger percentage than house prices by 2021.
The report forecasts that property values will rise by 13% over the next five years, while rents will increase by 19%. The estate agent blames the huge difference on flat growth of house prices due to Brexit negotiations. This in turn will force more people to rent, increasing demand in the rental sector, and pushing up rents. The report stated that rents in London will rise by 24.5%, as first time buyers find it particularly difficult to get on the property ladder in the capital.
Savills predictions also cite the tax changes introduced for buy to let investors, which may put them off buying rental properties and creating a shortage of homes to rent. Over the coming two years, the report predicts that house price growth will remain flat, as Brexit negotiations create fragility among home buyers.
However, house prices across the UK are not expected to fall, as the interest rates are currently so low. The head of residential research for Savills UK, Lucian Cook, states that by 2019, the economy should have greater clarity which will stimulate house price growth, leading to the 13% increase by 2021.
Mortgage advisers embark on a CeMAP course so that they are aware of house prices and factors which may impact, so they can help buyers to make the most suitable choice at that time.
