Rents in the UK are projected to increase by 15% over the next five years, according to a warning from a property group.
A shortage of properties will see UK rents jump 15 percent over the next five years, according to the Royal Institution of Chartered Surveyors (RICS). In its July survey, 22 percent more respondents reported a fall in supply, as new rental properties continued to drop out of the market, according to RICS. This is also the eighth consecutive quarter of availability decline.
The lack of rental properties is likely to push rents up by almost 2 per cent across the UK this year. But RICS stressed that the supply crunch will grow increasingly acute in the medium term and forecast rents rising 15 percent by the middle of 2023. Areas like East Anglia and the southwest are set for the biggest increases in rents over this period.
According to RICS, recent tax measures in the buy-to-let market have reduced tax relief on properties and raised stamp duty on second homes, denting supply. These changes, which are still being implemented, have changed the dynamics of the rental market. RICS chief economist Simon Rubinsohn said: 'While the tax reforms appear to be having the desired effect on the buy-to-let sector there are concerns that the decline in supply could result in upward pressure on rents unless there was a significant acceleration in the build-to-rent sector or state sponsored social housing.' It is hard to see either doing much to address the shortfall, which could hurt families that can’t afford to become homeowners or where renting is a better fit.
Abdul Choudhury, RICS London policy officer, said the government must act quickly to tackle the issues facing the private rented sector and look for ways in which it can support responsible landlords. He made the point that if the government wants the sector to be less the first port of call, then it needed to provide alternatives that work. And if one seeks to improve the sector, such policies — professionalizing landlords through regulation, rethinking how to tax — should be issues.
According to a recent report by the Centre for London, one of the main reasons for this exodus is the absence of affordable housing in the capital. 92618594 the affordability crisis married to a an uncertain post-brexit world is killing the golden goose,especially in twentysomethings to thirtysomethings who are moving anywhere else.